HOME: FIND. BUY. PROTECT. The Third Leg.

It’s National Homeownership Month and our goal is to help educate and prepare future home buyers for the home buying process.  In our last two posts, we’ve discussed how buying a home can be like standing on a stool.  It takes a lot of balance, and to keep from falling, you’ll need all three legs of the stool working together to hold you up.

In today’s blog, we’ll focus on the third leg of the stool, the title agent, who helps protect the home you purchase.  Your title agent will work to provide you with peace of mind during your home buying process, reduce your risk, and help protect your property rights by examining and verifying legal documents associated with the property you are purchasing.  As you can imagine, this is a complex process, but it’s very important because it ensures the title can be legally transferred to you, so you can be confident that once you purchase the property, you will be the rightful owner.

To ensure the title is valid, there will be a thorough examination of property records, known as a title search.  During the title search, your title agent searches public and private records looking for previous liens, tax issues, unpaid child support, ownership disputes, forgery or fraud and other possible issues that might impact ownership.  As you can imagine, this is no “Google Search.”  The title company may require a survey to determine the boundaries of the property, whether the home on the property sits within those boundaries, whether there are any encroachments on the property by neighbors or any easements that may impact an ownership claim.

Once it has been verified that the title to the property you are purchasing is valid, your title agent will offer you an owner’s title insurance policy to help protect your property rights.  Title insurance protects the lender and/or owner against lawsuits or claims against the property that result from disputes over the title.  Your mortgage lender will purchase a separate “lender’s policy” to protect their financial interest in your property, BUT only an “owner’s policy” protects YOUR interests in the property.  Owner’s title insurance has a one-time fee, and protects you for as long as you or your heirs own the property.  The cost of title insurance depends on the size of the loan and varies greatly from state to state.

The party involved in completing a transaction between a buyer and seller is known as the settlement agent.  Often times, your title agent will also be your settlement agent; therefore, you may meet with or speak with this agent, or their office, on multiple occasions.  At closing, your settlement agent will bring all the necessary documentation related to the closing, explain it to both parties prior to signing, collect closing costs and distribute monies.  You should feel free to contact your title/settlement agent at any time to get answers to your questions on title searches, title insurance, or closings.  Finally, your settlement agent will ensure that the new titles, deeds and other associated documents are filed with the appropriate entities.

From contract to closing, your Realtor®, lender and title agent work together to make this exciting experience as simple and painless as possible.  Buying a home is likely the biggest financial (not to mention, emotional) decision of your entire life, and having a good support system to help keep you balanced is what you need, and deserve.   Rahmati Law Firm is a Vetted and Verified Stewart® Trusted Provider™ and our attorneys stand ready to assist you with all of your real estate closing needs. If you would like to speak with our real estate team about scheduling a closing with our firm, please fill out the short form below, or you may contact our real estate team anytime by calling 256.533.2002.

To learn more about what it takes to be a Stewart® Trusted Provider™, please visit http://www.stewart.com/agency-services/stewart-trusted-providers.

“No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”

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Do You Know?

“Photos posted online of four smiling sisters has taken on a new, tragic meaning in the aftermath of a deadly crash that cost them their lives and left several others seriously injured in a Memorial Day crash on Interstate 95,” according to Florida Today.  The mother of the four young girls was driving the 2006 Dodge Durango when it lost a tire and flipped multiple times as the SUV veered off the highway.

According to investigators, the family and friends in the vehicle were on their way back home after spending the holiday together.  Troopers say eleven people were crammed into the vehicle which typically seats up to eight people, according to car dealers and Kelly Blue Book’s website.  Investigators are still looking into how many of the occupants were wearing seat belts.

The Alabama Department of Public Safety (DPS) wants to keep you, your family and friends safe on the roadways.  Several laws have been put into place to do just that.  Do you know what they are?  A wide range of areas are covered, including: child car seats, safety belts, cell phone usage, driving under the influence and more.  It’s important you know and abide by all safety laws.  The following information was supplied by the Alabama Department of Motor Vehicles:

Child Car Seat Laws

Alabama law requires children of certain ages and sizes to be seated in appropriate child car seats.  Use the following guide from the Alabama Department of Public Safety when buying a child car seat.

  • Up to 1 year old or 20 pounds: A rear-facing, infant-only or convertible seat
  • 1 year old – 5 years old or 40 pounds: A forward-facing car seat
  • 5 years old – 6 years old: A booster seat

*Remember to always follow the manufacturer’s weight and age specifications and recommendations when using a child car seat.

Alabama Seat Belt Laws

If you are in the front seat of a running vehicle, you must wear a safety belt or risk a fine…from the Alabama Department of Public Safety (DPS).  If you are seated in the back seat, you are NOT required to wear a seat belt unless you are under 15 years old.

According to the Center for Advanced Public Safety (CAPS), there have been 240 motor vehicle fatalities year-to-date in the State of Alabama.  100 of those were not wearing a seatbelt.

*Only traffic crashes investigated by Alabama State Troopers are included. 

Cell Phone Use

In Alabama, if you are 16 or 17 years old and have only held your license for under 6 months, it is illegal for you to use your cell phone or mobile device at any time while driving.  Regardless of your age, it is illegal to use a cell phone while driving to send or receive:

  • Text messages
  • Instant messages
  • E-mails

According to The Center for Advance Public Safety (CAPS), “In 2014, there were a total of 820 auto accident fatalities in Alabama, and there were 27,665 investigated Alabama accidents. Distracted driving was the primary contributing circumstance of 45 fatal Alabama crashes in 2014 and was the primary contributing circumstance in 8,557 of all Alabama accidents.”

DUIs and Drunk Driving

The Alabama Department of Public Safety (DPS) enforces strict laws against driving under the influence (DUI).  You are not legally allowed to drive a vehicle if you have the following blood alcohol content (BAC) levels:

  • 0.02% or more for anyone under 21 years old
  • 0.02% or more for school bus or daycare drivers
  • 0.08% or more for anyone operating a vehicle
  • 0.04% or more for anyone operating a commercial vehicle

According to the National Highway Traffic Safety Administration (NHTSA), in 2014, more than 30% of all vehicle fatalities were alcohol related.

For more information on Alabama safety laws, please visit http://www.dmv.org/al-alabama/safety-laws.php

HOME: FIND. BUY. PROTECT. The Second Leg.

Today officially kicks off National Homeownership Month, and our goal is to help educate and prepare future home buyers for the home buying process.  In our last post, we compared buying a home to standing on a stool.  It takes a lot of balance, and to keep from falling, you’ll need all three legs of the stool working together to hold you up.

Today we’ll focus on the second leg of the stool, the lender.  The lender helps you finance the home you want to purchase.  This part of the home buying process can be very complex, and understanding it end-to-end is important. Many people feel overwhelmed because of the amount of paperwork to be completed, but knowing what to expect will help you make sound decisions about your home purchase.  The more knowledgeable you are the better, but a good lender will be by your side every step of the way to prepare you for what happens next.


Pre-Qualification

The first person you’ll meet during this part of the process is your loan officer.  Your loan officer can assess your creditworthiness and determine your eligibility to purchase a home prior to you formally applying for a home loan through the “pre-qualification” process.  They’ll also evaluate your household income, debt, and assets to determine your “buying power”, or how much you can afford.  Your loan officer will discuss various loan types and terms of mortgages with you.  Loan officers are mortgage specialists, so they’re a good resource for helping you determine which mortgage option best suits your financial situation.  Having a letter of pre-qualification from a lender can help strengthen your negotiating position when making an offer on a home.  Keep in mind that you are not obligated to obtain financing from the lender who pre-qualifies you.


Preparation

Federal law requires your lender to provide you with a Loan Estimate, which includes a summary of your settlement charges, within three days of applying for a loan; however, prior to making an offer on a specific home, you can ask your loan officer to provide you with an estimated cost to close.  Doing so will provide you with an estimate of the amount of closing costs, escrows and prepaids you’ll need in order to purchase the home.  Having this information early may be helpful when budgeting the out-of-pocket costs of your home purchase.


Application

Your pre-qualification is not a guarantee that you’ll be approved for a loan.  Once you have a signed purchase agreement on the home you intend to buy, you’ll formally apply for a mortgage.  Again, you’re not obligated to apply with the same lender who pre-qualified you.  During this stage of the process, you will likely meet your loan processor.  The processor’s job is to prepare your loan information and application for presentation to the underwriter.  You’ll provide your processor with the appropriate documentation necessary to apply for your loan.  Your processor will ask you for a variety of documents, including, but not limited to, tax returns, W-2s, bank statements and pay stubs.  Your processor ensures that all the proper documentation is included in your file, all numbers are calculated correctly, and everything is in the proper order.  They will then send your file to the mortgage underwriter.


Authorization

Your underwriter is the decision maker and is authorized to assess whether or not you’re eligible for the mortgage loan you’re applying for.  Your underwriter will ultimately approve or reject your loan application based on your creditworthiness, employment history, assets, debts, and other factors.

Once you’ve completed the application process, your loan officer will provide you with a variety of documents outlining the costs associated with your loan, including the Loan Estimate and Closing Disclosure, to help prepare you for closing.   These forms are required by law, for your protection.  As noted earlier, within three business days of completing your loan application, your loan officer must provide you with a Loan Estimate which provides you with an estimate of your loan terms and details of your settlement charges should you be approved for a mortgage loan.  Once the underwriter approves the loan, your loan officer is required to provide you with your Closing Disclosure at least three business days before your scheduled closing is to occur.  This tool allows you to double-check that all of your loan details are correct.  Once you approve your Closing Disclosure, you’ll be ready to move forward to the closing.

Your lender is a lot like your Realtor®.  They also work for you 24/7 — whether you need a little more information or guidance, have questions about what happens next, or just need a shoulder to lean on in order to feel at ease.  Buying a home is likely the biggest financial decision of your entire life, and your lender doesn’t take this lightly.

To verify a lender, please visit www.nmlsconsumeraccess.org

“No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”