Stirling, Western Australia (Photo credit: Wikipedia)
All About Your Escrow
- What do I need to do before my appointment to sign loan paper?
Cashier’s Check: Obtain a cashier’s check made payable to the escrow company in the amount indicated to you by the escrow.
Lender’s Requirements: Make sure you are aware of your lender’s requirements and that you have satisfied those requirements before you come to the escrow company to sign your loan documents.
Hazard Insurance: If you are purchasing a single-family home/detached home, be sure to order your hazard insurance. Then call your escrow agent with the insurance agent’s name and phone number. You must have secured hazard insurance before the lender will send its money to the escrow company.
Identification: Please bring a driver’s license or passport (photo ID) for each person who will be on the title with you to the escrow company. This is needed so that your identity can be verified by a notary public. It is a necessary step for your protection.
After you have signed all the instructions and documents, the escrow officer will return theme to the lender for review. This usually occurs within a few days and upon completion, the lender is ready to fund the loan and advise escrow.
- What is an “Escrow Closing”?
The “escrow closing” is the culmination of the transaction. Is signifies legal transfer of title from the seller to the buyer. Usually the Grant Deed and Deed of Trust are recorded within one working day of the escrow’s receipt of loan funds. This signifies the official close of escrow.
- When will I receive the deed?
The original deed to your home will be mailed directly to you at your new home by the County Recorder’s office. This usually takes several weeks, sometimes longer.
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Success = Effort (Photo credit: Celestine CYour Attitude is Essential to Your Success
The single most important determining factor to your success is your attitude. Here are Five things to practice daily to make certain you have the right attitude.
- When it comes to attitude, find the positive. Attitude is a choice and a manner of how you see things. For example: “We can complain because rose bushes have thorns, or rejoice because thorn bushes have roses,” said Abraham Lincoln, a man who suffered many tragedies yet still managed to hold on to hope.
- Embrace an unwavering faith, that you will prevail. While embracing the hard truths of any current situation, essential to your success is maintaining an unwavering faith that you will succeed. A positive attitude finds opportunity in difficulty. A negative attitude sees difficulty in every opportunity. Dissociate yourself from the latter.
- Make the best of what you have. Make it your habit to appreciate daily all the good things within your grasp and do so with awe and wonder. Those with a positive attitude don’t have the best of everything; they make the best of everything they have.
- Changing your attitude will change your circumstances. Your attitude affects your behavior, your decisions, what you communicate and ultimately your actions. Marcus Aurelius said it succinctly: ”Our lives are what our thoughts make it.” Keep your attitude positive and you’ll be quick to leverage the good and negotiate the difficult.
- Attitude is the one thing you have the most control over. Regardless of what happens, you have control over your attitude. Wake up each morning not to your alarm clock but to your opportunity clock. Embrace each day with a nothing-ventured, nothing-gained mindset. Be the creator of circumstance and not the creature of circumstance.
saving and retirement (Photo credit: 401(K) 2013)
Want to rescue your retirement?
- Start saving, keep saving, and stick to your goals. If you’re already saving, whether for retirement or another goal, congratulations! If you’re not saving, start now! You can start small, but start. The sooner you start saving, the more time your money has to grow. Devise a strategy and stick to it.
- Contribute to your employer’s retirement saving plan. If your employer offers a retirement savings plan, such as a 401(k) plan, sign up and contribute all you can. Make sure to contribute enough to capture your employer’s matching contribution, if available. Over time, compound interest and tax deferrals can make a big difference in the amount you may potentially accumulate.
- Put money into an Individual Retirement Account. When you open an IRA, you have two options: a traditional IRA or Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. You can set up automatic withdrawals from your checking or savings account to be deposited in your IRA. You have until April 15, 2014 to make IRA contributions for the 2013 tax year.
- Don’t touch your retirement savings. If you change jobs, leave your savings invested in your current retirement plan, or roll you funds over to an IRA or your new employer’s plan. If you withdraw your retirement savings now, you’ll lose principal and interest and you may lose tax benefits or have to pay withdrawal penalties.
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How to Get Your Credit Report
Checking your credit report every year is a good idea; you can catch errors or fraudulent activity before it gets out of hand. If you’re planning to borrow money for a big purchase like a car or home, check your credit about six months before applying for the loan. Cleaning up or repairing your credit can take a minimum of 30 days and often much longer, so you’ll want to know early if your report is less than glowing.
The three major credit bureaus that keep track of your credit history are Equifax, TransUnion and Experian. Lenders report your payment activity to the bureaus and are allowed to request and review credit reports when they are considering granting credit. One credit report is usually all you need if you just want to get a general idea of how you rate. However, since the information in each of the three reports can vary, you should order one from all three bureaus if you want to know exactly what each one is reporting.
The Fair and Accurate Credit Transaction Act (FACTA) allows for all consumers to receive a free copy of their credit report from each of the three credit reporting bureaus every 12 months. Reports can be ordered through www.annualcreditreport.com or by calling 877-322-8228. You will not be able to receive these free annual reports by contacting the credit bureaus directly. However, if you’ve been denied credit within the last 60 days, you may be entitled to receive copies of your credit reports. Find out which of the three bureaus was used by your lender, and then contact that bureau for your report.
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Housing (Photo credit: james.thompson)
The right amount to borrow
To find out whether you can afford to repay a loan, take the difference between your income and your expenses. This is your discretionary income. From this amount, you’ll need to first deduct your minimum monthly savings. It’s a good idea to also deduct additional savings to help you meet some of your financial goals. These might include buying a house or a new car or building an emergency fund.
What’s left over defines how much new credit you can afford to take on. If you’re only just meeting your monthly bills, an unexpected expense could mean a serious financial setback.
If you are already paying off debt, which should be included in your expense summary, you may not be in a position to use additional credit until your existing obligations are repaid.
English: Mortgage debt (Photo credit: Wikipedia)
Understanding the basics of the Ability-to-Repay Standards
Discover what new information is required of potential borrowers with regard to new mortgage loan applications now that Ability-to-Repay (ATR) Standards are in effect.
In 2013, federal regulators issued Ability-to-Repay (ATR) Standards intended to ensure that borrowers can comfortably afford a home loan. The ATR Standards go into effect for loan applications received on or after January 10, 2014.
Clients should be aware that the new rules require lenders to collect and verify eight types of financial information from a potential borrower:
- Current income and assets
- Current employment status
- Credit history
- Monthly payment for the mortgage
- Monthly payments on other mortgage loans (second-lien loans made at the same time as the first-lien mortgage)
- Monthly payments for other housing-related expenses, such as property taxes, homeowner’s insurance and homeowner’s association fees
- Amounts paid on all other debts
- Monthly debt payments compared to monthly income, aka debt-to-income ratio
Taking all of this into consideration, the lender must determine that a borrower has sufficient income/assets and a debt-to-income ratio that would enable the borrower to comfortably afford their monthly mortgage payment.