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What Is A Loan Payoff Letter?

What Is A Loan Payoff Letter?

Are you selling a home in Cape Coral or Fort Myers that has a mortgage on it?   You may end up hearing the terms “Payoff” or “Payoff Letter” in the sales process of your property.

This letter, issued by the lender, states a precise payoff amount that is valid up to a certain date.   As long as your payment is received by the date specified in the letter, your loan will be fully paid off.

Your Mortgage Balance Is Not Your Pay-Off Amount

The balance on your mortgage statement is rarely the amount you need to remit in order to pay off the mortgage in full.  Accrued interest, deferred payments, and/or early payment fees need to be calculated by the lender in order to determine the payment that truly fulfils your loan obligation.

During the sale of a home a payoff letter is typically requested by the title company servicing your closing.  It will specify the amount that needs to be paid in order to satisfy the seller’s loan.  The transfer of ownership typically requires satisfication of the seller’s loan payoff in order to be insured and finalized.

Timing is always delicate in a real estate transaction.  Release of funds, clear title, and myriad documents need to be ready on time in order for a real estate closing to take place.  Any delays in the closing date that go past the date on the payoff letter can make the payoff amount invalid necessitating a new letter and matching funds.

Other Uses for a Payoff Letter

You also need the information in a payoff letter before you refinance a mortgage or if you choose to pay off the mortgage early. The letter will have the amount to pay and will often include special payment instructions on who to contact since a full pay off maybe processed by a different department than the one handling monthly payments.

Whether you are selling, refinancing, or pre-paying a mortgage.  Remember to contact your lender for a payoff letter.  This document ensures that you will make a full payment for the proper amount and in the proper manner.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: How Do I Choose The Right Lender For Me?

How Do I Choose The Right Lender For Me?

How Do I Choose The Right Lender For Me?

 

Are you looking for a lender in the Fort Myers or Cape Coral areas?

There are some great tips in this video. Choose your lender carefully. Look for financial stability and a reputation for customer satisfaction.

Be sure to choose a company that gives helpful advice and that makes you feel comfortable.

A lender that has the authority to approve and process your loan locally is preferable since it will be easier for you to monitor the status of your application and ask questions. Plus, it’s beneficial when the lender knows home values and conditions in the local area.

Do your research, and ask family and friends.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Do I Need A Property Survey?

Do I Need A Property Survey?

Do I Need A Property Survey?

Are you purchasing property in the Fort Myers or Cape Coral areas and wondering if you need a survey?

A property survey is a precise measurement and delineation of the size, shape, and boundaries of a property.  Typically performed by trained and certified Surveyors, property surveys serve to create an official record of property lines, easements, and land placement.  In layman’s terms, it lets a property owner know exactly what they own and what they don’t.

Am I Required To Get A Survey When Buying a Property?

Many states do not require home buyers to secure a survey prior to purchasing a home.  However, lenders typically require surveys be conducted and certified as part of the loan process.  There are some cases where lenders may allow loans to fund and real estate transactions to close with an older survey if it can be re-ceritifed.   Whether it is required or not, it is strongly recommended to invest in one as there are many pitfalls you can avoid with a new property survey.

  1. Old surveys can be landmark based

Today, property surveys are conducted scientifically with sophisticated lasers, prisms, GPS, and high-tech geolocation tools. However, if your home or the property you are buying is old enough, boundaries may documented using landmarks.

An old survey may indicate that your property line extends to the creek or the large oak tree on the south-west corner.  If the creek ran dry or the tree was cut down years ago, how will you know how far your land extends?  If your neighbor decides to build a work shed and you feel it’s over the property line, do you have a survey that can prove an encroachment?

  1. Know the actual size of the property

This may seem extreme, but these cases do happen.  The Washington Post reported the story of a family who bought their dream home with a large backyard.  That is, until they were denied a permit for building a pool because their backyard was too small.  Thinking there was an error, the owner responded with the dimensions of the large backyard.  The city’s response?  The property survey on file showed they only owned about half of that beautiful backyard.

Another risk is that structures on your own property may be in violation of building codes.  For example, the gorgeous greenhouse that inspired you to buy the home may be two feet too close to the property line as such the city may charge you with moving it, tearing it down, or paying hefty fees for code violations. It doesn’t matter if it was there for 20 years before you bought the home.  The old adage “ignorance of the law excuses no one” applies and there is no guarantee you will be granted an exception.

  1. Property lines and encroachments change

We’ve shared the risk involved with not having a survey or relying on antiquated surveys, but what if the survey is just a few years old?  Or if the house is new construction, should I still get a new survey?  Here are a few reasons why it maybe worth it.

Municipalities handle dozens to thousands of land disputes every single year.  According to FindLaw.com, disputes are not always resolved in a manner favorable to the property owner.  Let’s say you get a survey for your new home and it shows that your neighbor’s garage is 6 inches over your property line.  Does this automatically mean your neighbor has to tear down their garage and give you your land back? No.  If the garage was built with the prior owner’s consent and it has been there long enough, the municipality may grant a prescriptive easement allowing that garage to stay right where it is.

Other surprises may involve recent encroachments by the city or utility companies.  You may be willing to pay a certain price to buy a home with a specific lot size, but if several square feet of that lot are no longer available to you, your willingness to pay may change.

Finally, if you are buying a newly constructed home, beware of any unofficial diagrams given to you by the builder.  Often these diagrams are estimates and not based on any real measurements.  Before closing on your home, insist on a new survey by a certified survey professional or secure your own.  Finding out that you own only part of the land you thought you bought is never a pleasant surprise.

Property Surveys Avoid Unpleasant Surprises

Since property surveys are not always required by states or lenders, many home buyers do not even think to secure one.  Others may balk at the out-of-pocket cost which can range from $200 to $1,000 depending on the location and size of the property.

However, investing in a survey makes sure you are getting what you are paying for whether you are building a new home or purchasing an existing structure. Protect your investment by making sure that you know what you are buying.  If there are any questions about property lines get them resolved before closing.  Plus, you never know when a survey will show that you are about to own more land than you thought – good surprises happen too!

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Happens After I’ve Applied For My Loan?

What Happens After I’ve Applied For My Loan?

What Happens After I’ve Applied For My Loan?

 

Have you applied for a loan to purchase a home in the Fort Myers or Cape Coral areas and now wondering what’s next?

It usually takes a lender between 1-6 weeks to complete the evaluation of your application.

Like the video shows, it’s not unusual for the lender to ask for more information once the application has been submitted. The sooner you can provide the information the faster your application will be processed.

Once all the information has been verified the lender will call you to let you know the outcome of your application. If the loan is approved, a closing date is set up and the lender will review the closing with you.

And after closing, you’ll be able to move into your new home.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: How Do School Zones Affect Home Buying?

How Do School Zones Affect Home Buying?

How Do School Zones Affect Home Buying?

Curious to know how school zones may impact a buyer’s decision when purchasing a home in the Fort Myers or Cape Coral areas?

When reading home listings online, you often see mention of school zones and access to quality schools.  In general, parents want to live in neighborhoods that allow their children to attend the best schools.  However, schools zone impact far more buyer decisions than just parents. In fact, there are buyers who either are drawn to certain school zones or are weary of being too close to a school.                                   

In this article, we explore different types of buyer school zones considerations and how it may impact their buying perspective.

Parents with School-Age Children – This is the most obvious when the talk about quality schools arises and things such as: walking distance to schools, or convenient bus routes to highly sought-out magnet or charter schools are explored. It is not uncommon for families to stretch their budgets to buy a home in neighborhoods with great schools.

Sports – Similarly, families have been known to move to neighborhoods that grant access to a schools with specific sports teams. Parents of an all-star may want to ensure the best sport team experience and even place their child where they will have the best visibility by college scouts.

Child Care Providers – Whether grandparents, certified childcare providers working out of a private home, or commercial day-care owners, these buyers will seek out properties very close to schools for the grades of children that they support. This may mean focusing on school zones with elementary schools rather than being closer to high schools.  Of course, teachers, school administrators, and school staff may also chose to live close by and have a short, easy commute to work.

Commuters – In some states the car lanes to access schools extend onto city roads. During drop-off and pick-up times, these roads can become congested for more than an hour.  Commuters who need to use these road to get to work, but do not have children attending school, will often look for homes that do not require driving through these slow traffic areas.

Quiet Homeowners – Homeowners who are seeking a quiet neighborhood, especially during schools hours tend to avoid homes near schools or parks. While hearing a child laugh may be endearing to some, hearing the roar of 100+ students at recess and lunch may be unbearable to some homeowners.

Taxes – In some communities around the United States, the quality and popularity of schools drive up property values and property taxes. Homeowners without school-age children may not feel the value of such high taxes is worth living in that location and relocate to areas where school zones don’t carry such a high premium.

Storm Shelter – Storm coverage in the news has highlighted the role of schools as shelters and safe places for communities vulnerable to severe weather. For some homeowners, proximity and safe access to schools that double as shelters are an important factor when buying a home.  This is especially true for homeowners with pets who need access to shelters that accept animals.

Many factors contribute to choosing one neighborhood over another.  Schools zones often are a main factor in the decision making process.  While it’s instinctive to think that families with school-age children will focus on school zones when buying a home, it is also true that buyers without school age children will also consider school zones and school location for different reasons when making a home buying decision.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Is A Qualified Mortgage?

What Is A Qualified Mortgage?

What Is A Qualified Mortgage?

 

Do you know what a qualfied mortgage means in the Fort Myers and Cape Coral areas?

As this video explains,  Federal laws put into effect in 2014 and  supervised by the Consumer Financial Protection Bureau define lending practices and loan terms for a new category called “Qualified Mortgages.”

They provide stable loan features for consumers and improve legal protection for lenders who follow the guidelines.

These guidelines require lenders to assess each borrower’s ability to repay their mortgage loan to ensure the borrower’s monthly DEBT – including mortgage – be no higher than 43% of their monthly gross INCOME.

The laws also define unacceptable loan terms:

  • interest-only loans
  • terms over 30 years
  • negative-amortization loans that increase principal over time
  • most balloon loans

These terms do not meet the Qualified Mortgage guidelines.

The laws aim to provide consumers with objective guidance  about reasonable debt from the CFPB and in return, to grant lenders who follow that guidance with higher levels of protection from lawsuits.

Ask your lender about Qualified Mortgage options for your home purchase.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Loan Officers, Underwriters, and Mortgage Brokers – Who’s Who?

Loan Officers, Underwriters, and Mortgage Brokers – Who’s Who?

Loan Officers, Underwriters, and Mortgage Brokers – Who’s Who?

Buying a home in the Cape Coral or Fort Myers area soon?

The world of real estate has many different types of professionals.  If you are a buyer looking to purchase a piece of property with financing, an area that can get a little confusing involves the professionals within the mortgage lending landscape.

According the National Association of Realtors, over 80% of buyers require some level of financing to be able to buy a home.  Ironically, while ensuring you are qualified for a loan to buy a house is the recommended first step in the home buying process, many buyers start by contacting a real estate agent.  When the need for pre-qualification comes up, buyers will usually do one of two things:  Go to their bank or use the Realtor’s recommendation.

Either option can lead to exceptional results and an outstanding buying process, however, buyers often do not realize that there are different providers in the mortgage space and who they choose can impact the loans offered and how much they pay for their home in the long run.  To help you understand your options, we have outlined several key players you may come in contact with or hear about throughout the process.

Loan Officers

Per the Bureau of Labor Statistics, Loan Officers evaluate, authorize, or recommend approval of loan applications for people and businesses.  Most Loan Officers are employed by commercial banks, credit unions, and related financial institutions.  This means that while they may have access to different types of loans available through their lending institution, they can only fit you to a loan offered by their employer.

To qualify for loan, a Loan Officer may need you to have an existing account with their bank or lending intuition and to meet stringent requirements that match their employer’s tolerance of risk.  Since the 2008 mortgage crisis in the United States, some banks have exited the mortgage business while others have adopted conservative loan requirements.

When deciding on a Loan Officer, you need to research the reputation of their employer, after all they will likely service your mortgage long-term.  You also need make sure you can communicate and get along well with your Loan Officer.    If you don’t hit it off, try visiting another branch of the same lending institution, they will have access to the same loan programs.

Loan Officers will typically take your application and gather all necessary documentation related to your loan.  This package is then submitted to other departments such as processing and then underwriting where approval decisions are made.  Loan Officers are paid either hourly or a salary by their employer and may receive bonuses for number of loans applications or dollar amount of the loans.

Mortgage Brokers

Think of a Mortgage Broker as an independent consultant.  They may work with a mortgage brokerage company or their own a mortgage brokerage.  They are not lenders and in the majority of cases they will not service your mortgage loan.  Instead, they have relationships with a diverse collection of lenders and will find a loan to meet your needs.  The source of funding may include banks, wholesale mortgage lenders, equity funds, and even private lenders.

Mortgage Brokers will assess your loan needs then “shop the market” for the best loan available.  There are strict regulations in place to help ensure that your broker provides the best loan for your needs rather than a loan that pays them the most.

Depending on the size of the team, a mortgage broker may have in-house loan processors or may outsource this function.  Ultimately, a mortgage broker who wants to be successful will ensure clients have the best loan experience possible, regardless of how their back-office functions are arranged.

A well-established mortgage broker has great relationships with their lenders and the underwriting teams and has a high rate of closing loans in a reasonable amount of time.  They are paid by the lender typically as a flat fee or percentage of the mortgage amount.  Newer industry regulations prevent mortgage brokers from being paid or bonused based on the interest rate of a loan.

Mortgage Underwriters

A Mortgage Underwriter may work for a bank, lending company, or private fund.  They are the decision makers who review all the documentation submitted for a loan and decide if all requirements have been met and if the loan applicant is qualified for the loan.

They represent the lender and are responsible for analyzing the loan package and determining if the lender will take on the risk associated with approving a loan.  They examine criteria such as the applicant’s credit rating and history, the applicant’s perceived capacity for repaying the loan, and the value of home being purchased in terms of loan collateral.

When a loan is delayed or “falls through” many people think this is done by their Loan Officer or Mortgage Broker.  Certainly, failure to properly match applicants with loan requirements or to submit critical documentation can impact the viability of a loan.  However, the ultimate decision on approving or declining a loan falls with the Mortgage Underwriter.  While most properly submitted loans are approved, sometime changes in underwriting requirements can “kill” a loan and stop a real estate transaction.

Mortgage Underwriters are employed by banks and lending institutions and go through extensive training to evaluate loan applications.  While they must be mindful of risk, Mortgage Underwriters do not aim to decline loans.  On the contrary, their paycheck and job security depend on approving as many healthy loans as possible.

Know Who Guards the Money!

When it comes time to buy a home or refinance your current home, be mindful of the service providers available to you.  In some instances, the Loan Officer at your bank may have the best rates and terms for you.  In other situations, your best bet may be to consult with a Mortgage Broker with access to dozens (maybe hundreds) of lenders who may offer better rates and terms.

Whomever you choose, be certain to submit all necessary documentation carefully so that the Mortgage Underwriter can clearly see that you meet all requirements and easily approve your home loan.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: Title Insurance Explained Visually.

Title Insurance Explained Visually

Title Insurance Explained Visually

 

What is title insurance and why should any buyer purchasing a home in the Fort Myers or Cape Coral areas get it when purchasing a home (single family, townhouse, condo, apartment, or whatever format your home purchase takes)? Doesn’t the attorney or settlement company handling the closing see to it that you have a clear title?

Title insurance prevents the property owner from suffering financial loss if, at any time during his ownership of the property, someone comes along who can show that they have full, or partial, ownership of the property instead.

A careful title search is done at the time property changes hands. On rare occasions mistakes are made anyway. Property can change hands in a number of ways including by deed, by will and by court action. Typically, these proceedings are recorded in different places. Searching the history of ownership to be sure nothing has fallen through the cracks is a tedious job that requires alertness, intelligence, and skill.

It is very likely that the value of your property will go up over the years. As time passes, these elements are likely to result in your home equity’s being your largest asset. Just how devastating would it be if you eventually discovered that someone else owned what you’d always thought was your home?

Do yourself a favor. When you buy a home, buy title insurance.  And watch the video to understand the essentials.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: 5 Room Makeover Ideas.

5 Room Makeover Ideas

5 Room Makeover Ideas

If you own a home in the Fort Myers or Cape Coral area and have been on the hunt to spruce up a room or two in your house then you have landed at the right spot.  Consider these 5 room makeover ideas during your planning!

  1. Everything Has A Place: A Walk In Closet

If you have become a recent empty-nester or looking to do something with the guest room, converting an old bedroom into a walk-in closet is something to think about!  Just imagine having a whole wall…just for shoes.

If the room is large enough, you can even have a center island installed to hold ties, accessories, and jewelry.  Full length mirrors can be added to wall areas or section doors.  Shirts can be separate from slacks and sweaters can have their own kingdom.  If you need to sit while you tie your shoes, no worries – just use your footwear bench. The possibilities are endless and overall, converting a bedroom into a closet is relatively inexpensive and can typically be done without structural changes or permits.

  1. A Space for Your Passion: The Hobby Room

Perhaps it’s time for your passions to have their own space.  Bedrooms can be transformed into spaces that house materials and work areas for a variety of fun hobbies and pass times.  Are you a crafting maven?  Into model building? How about sewing?  Or perhaps a music room with a collection of guitars?  With the right lighting and ventilation, that old bedroom could even become a new studio for painting or sculpting (or both!).

Transforming a former bedroom into a hobby heaven can be as simple as removing furniture and adding a work bench.  If you want something more dramatic or high-end you can add cabinetry, storage areas, power strips, custom lighting, and even soundproofing.

  1. Be Your Best You: Your Personal Fitness Center

Perhaps you’ve had a gym membership that should qualify as a donation when you figure you have been to the gym 3 times in the past 5 years.  Perhaps those dollars are better spent converting an old bedroom into a fitness area designed just for you.

Fitness means a lot of different things to different people.  Maybe you are best motivated by the cardio trio of Treadmill, Elliptical, and Stationary Bike.   Or, sculpting muscle with free weights might be more up your alley. Quality fitness equipment can be purchase brand new or you can save quite a bit by shopping online or at second-hand stores for used equipment.

If investing in a ton of heavy equipment isn’t in your retirement plan, imagine a serene yoga room achieved with some soothing paint colors and a plush carpet.  Add a small self-contained water fountain and a quality speaker for playing music and presto, you have a peaceful meditation room that can serve as an escape from your everyday routine.

  1. Watch Your Flicks In Style: The Movie Room

Bring on the sun blocking curtains and leather recliners!  With the abundance of streaming services brining dazzling HD movies into your home, your home can beat out any fancy movie theater.   A simple and indulgent movie room can be created with a large screen TV and comfy couch.

For those who want more of a movie theater experience, there is a vast collection of theater style seating for the home.  Some seats even include cup holders or built in speakers!  Your viewing experience can range from an oversized flat screen TV, to a curved 4K screen that brings you in close.  Movie buffs may take it even further with a projector and screen that makes you feel like you should be holding a huge tub of popcorn.  Sure, these higher-end options can add up to a sizeable budget, but at least the popcorn will be much cheaper at home!

  1. Indulge Yourself: Master Bath with Home Spa

Speaking of higher-end budgets, how about luxuriating in a brand new master bath with spa features? If your empty nest goals involve more relaxation rather than entertainment, this might be just the make-over you need.

While building a bathroom requires a greater investment of time and money, the results can be so worth it.  Imagine never having to share a sink again.  You’ll have plenty of counter space, plus storage for your skincare and spa products.   How about a beautiful Jacuzzi tub – for two!  Or a rainforest shower with side jets. Other perks you can add include heated floors, a towel warmer, and….how about a personal sauna?

It’s a wonderful fantasy that can be your reality!  Visit spas in your area to get ideas, check out boards on Pinterest, and/or consult with a designer who specializes in crafting home spas.  In just a few weeks you could be fully submerged in a deep, warm bubble bath in your own home enjoying some much needed relaxation.

Make the House Yours with a Makeover

Former bedrooms can sit unused for years adding to the quiet and creating a space of nostalgia.  At some point, it becomes time to let go and reclaim the space in your home.  Add excitement, color, purpose, or even relaxation by transforming that room into a space that brings you joy.  Whether it’s painting, working out, watching movies, or hanging out in your sauna – a room makeover can be exciting and add a whole lot of fun to your life!

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Does The Ability To Repay Mean?

What Does Ability To Repay Mean?

What Does Ability To Repay Mean?

 

Looking to secure a home loan in the Fort Myers or Cape Coral areas and curious about the “Ability to Repay” rules?

In a nutshell, as this video shows, new laws require lenders to make a good-faith assessment of a borrower’s capacity to pay back their loan over time.

It’s a longer-term view that goes beyond immediate income, debt and credit rating.

These new Federal laws- supervised by the CFPB – require lenders to ask more questions –

about income, assets, employment, credit history, and monthly expenses –

as they relate to the proposed loan.

For example, a lender offering a mortgage with a low initial rate must try to assess how a borrower will handle the later, higher rate as well.

If you’re applying to borrow ask whether the program you’re considering is a Qualified Mortgage

Ability-to-repay rules are built in to loans that meet Qualified Mortgage guidelines.

At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: 5 Tips If A Storm Damages Your Home

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