What you may need to have with you at the closing table
There is great wisdom in the motto “always be prepared.” It is important whether you are in the market to buy a house for the first, second or third time.
As we've discussed in the past, buying a house is composed of a series of processes, from mortgage shopping, applying for a loan, looking for the right house and making an offer. As its title suggests, closing is the culmination of it all, where the seller, buyer, listing agent and other parties sign the paperwork to make the transfer of ownership official. Here are a few of the things — and people — you may need to have readily available at the closing table and why:
Your closing team
While you may be the one living in your house, several people help make closing on your home happen and you may need to have them with you during closing. These individuals may include an escrow officer, attorney, title insurance agent, real estate agent and your co-signatory, among others. These are generally the main people involved in closing transactions. The seller will have their team assembled as well. Your real estate agent and/or loan officer should be able to assist in making sure the necessary parties are there. The closing company involved in the transaction will also be able to provide guidance.
The proper materials
There’s a lot of paperwork at the closing table; all the i's must be dotted and t's crossed. Here are some items that you may need to bring, as recommended by the Consumer Financial Protection Bureau:
A cashier's check or proof of wire transfer
Personal identification, such as a photo ID or drivers' license - (Your current photo ID proves who you are and protects against fraudulent transactions)
Each of these items serves a specific purpose. For instance, mortgage companies require you to purchase homeowners insurance as a precondition to extending a loan. The declarations page of a homeowners insurance policy should be sufficient verification you've done so. You may also need to show documentation that you're up-to-date on your premium payments.
A cashier's check from your bank is traditionally used to cover certain closing expenses. Some of these funds, for example, may go toward the down payment. Plus, a cashier's check guarantees you have the funds to cover the expenses. These are also called certified checks. Wire transfer is another method of doing this and is often leveraged for security purposes.
Your checkbook is mainly "just in case." This is typically used to reimburse the seller for gas or propane that may be left in the tank.
Other things you may need
It's safe to say that no two closings are perfectly identical. With so many moving parts, some things or people you may need for one may not be relevant for another. What may be required is documentation associated with the home inspection. As Homelight notes, there are usually two home inspections: One is paid for and handled by the seller, and the other by the buyer. They also generally happen at different stages. The seller's inspection normally takes place prior to putting the home up for sale; the buyer's occurs upon placing an offer on a home.
Depending on the findings on the inspection, the terms of the purchase agreement may change, such as if there are safety issues or repairs that need to be taken care of. Ideally, these problems can be addressed before closing, but they may be hashed out at the closing table. For instance, a buyer may decide to take care of required fixes that would normally be the seller's responsibility. This is a scenario where it pays for both the seller and buyer to bring their checkbooks.
Ensuring a smooth closing experience is all about knowing what to expect. At Residential Mortgage Services, we'll help you every step of the way. Contact us today.
Looking Back at 2020
2020 has been a challenging year for all industries and communities alike. The pandemic has brought obstacles for every industry, and has changed the way many of us do business. In this year of uncertainty, giving back to the community and working together is more important than ever. Residential Mortgage Services, Inc. (RMS) has given back to communities within its footprint, while supporting it’s own employees through this unprecedented time.
Beyond helping guide their clients home, RMS has always been committed to giving back to the communities they serve. Over the course of the past year, the Company has made financial contributions to 14 local food banks across its footprint that provided over 30,000 meals to those in need. RMS also donated over $50,930 to local charities in November and December 2020, with half of the donations coming from RMS employees. These donations represent RMS's commitment to the regions in which it operates, as COVID-19 has led to record-breaking unemployment, economic disruption and food insecurity.
RMS’s employees also are very active within the communities that they live and work in. Up and down the East Coast, RMS employees volunteer, donate, champion causes and help. Here are just a few of the great contributions our employees and RMS made in our communities last year.
Through this pandemic, RMS has operated with over 90% of employees working from home. Record breaking 2020 volume levels tested the capacity limits of the Company’s Sales and Operations Teams. Employees have remained vigilant and adapted to new protocols and processes to keep business running smoothly. Productivity levels are higher than ever, and they attribute this to RMS employees embracing and supporting the spirit of teamwork and collaboration across all areas of the company.
Wishing you and your family a happy holiday season, and a wonderful New Year!
Medical Professional Mortgage Loan Programs
People who are fresh out of medical school may be concerned they won’t qualify for a mortgage because of their unique circumstances. Thankfully, there are mortgage loan programs that are designed to help medical professionals achieve their dreams of homeownership.
What is a Medical Professional Loan Program?
Tailored to meet the needs of residents, medical doctors within 10 years of residency, dentists and veterinarians, the Medical Professional Mortgage Loan Program may be the ideal lending solution for individuals working in the medical field. This type of loan program considers the timeline of those who went to medical school, and can help those who may have accumulated student debt, purchase or refinance a home.
It may be possible to not include student loans in the debt-to-income ratio (DTI) if evidenced they are in deferment for at least 12 months after closing.
The Medical Professional loan program also has a feature that allows for delayed employment if the borrower will be employed within 60 days after closing. This feature is available to newly licensed medical students who are beginning new employment or residency within 60 days of closing; or new medical professional graduates who are under contract for residency and are starting within 60 days of closing. This is especially helpful for medical professionals who are trying to coordinate home financing before the start of their new job or residency. Requirements that must be met for a borrower to use this feature are:
Provide a fully executed employment agreement/contract that identifies the terms of employment, including position, rate of pay, and start date. The agreement/contract must be non-contingent. Contingencies include drug tests and background checks. A letter from the employer clearing all contingencies is required, if applicable.
Employment start date referenced on agreement/contract must be within 60 days of note date.
Applicant must document reserves sufficient to cover the monthly liabilities included in the DTI ratio, as well as the PITIA (principal, interest, taxes, insurance and association fees - if applicable) for the subject property, for the number of months between the note date and the employment start date.
A verbal verification of employment (VVOE) must be completed that meets Pre-Funding Employment Verification guide supporting the executed employment agreement/contract terms.
These factors make homeownership much more achievable for medical professionals after completing their studies.
Who Qualifies for a Medical Professional Loan?
These loan programs are designed for medical doctors, those who have chosen a medical researcher position and newly licensed medical residents who are currently employed in residency or fellowship. Keep in mind, a copy of the borrower’s current state issued medical license or equivalent, is required to document eligibility. It is important to note that after graduating medical school, new doctors are awarded a provisional medical license to complete their residency. In addition to the license or equivalent, if a borrower is in a researcher position, the verification of employment (VOE) must provide support that the position is utilizing their doctorate skills.
If you are interested in learning more about medical professional loan programs, or other aspects of homeownership, please contact RMS today!
Touring homes smartly in a COVID-19 world
Few events have so dramatically impacted virtually every facet of our daily lives as has the coronavirus crisis. Its uniqueness and virulence swept the globe with shutdowns, spikes in unemployment, and many have lost their lives.
Now that most of those closures have been lifted — and the employment rate slowly improves — some Americans are taking a cautious approach toward returning to some semblance of pre-Covid-19 life. Others, meanwhile, are changing their behaviors entirely and remain practicing social distancing.
Somewhere in the middle are homebuyers, as most individuals who bought a home the traditional way say they would do it again if given the chance despite what they know now, according to the results of a new poll.
Among Americans who attended an open house within the past year, nearly two-thirds said they would attend another showing in the current conditions, according to a recent survey conducted by the National Association of Realtors.
Not only that, but they would rely more heavily on real estate professionals. Indeed, 47% of buyers acknowledged home experts — such as agents and loan officers — are particularly important for guidance during uncertain times. 53% of sellers echoed these sentiments. This leaves a group of people who say they would not attend an open house at least until it is deemed safe to do so by local authorities or medical professionals.
If you fall in the latter category, you're not alone. Virtual open houses are ongoing, which enable you to see via computer or mobile device just about everything you would under normal circumstances.
Here are a few things to keep in mind as you go about the homebuying process in a constantly evolving environment amid the Covid-19 world.
Do your homework on virtual open houses
Thanks to the internet, search tools, and home listing applications, doing your research has never been easier or more convenient. Taking a deep-dive into all the particulars of a potential home purchase is especially important for virtual open houses. Although modern technology is incredibly versatile and images are clearer than ever, nothing compares to touring a home. Thus, you'll really want to lean on your real estate agent who will likely be able to obtain details on the home that may not be available to you through regular home listing apps or search tools. For example, they may be able to get floor plans of the house which you can use a map to guide you during the virtual tour.
You may be surprised as to just how many people not only are looking to buy a house — largely due to record-low mortgage rates — but have attended virtual open houses. Talk to friends to see what they know and where to go.
In addition to your agent’s ability to find available listings and when they are showing, they can likely connect you with the Multiple Listing Service (MLS), a private real estate listing database that sends alerts to your email when certain properties in your area become available.
Linda Devlin, a Pittsburgh-based real estate professional, told Homelight that MLS is highly customizable.
"On the MLS, agents have always been able to post when we are going to have an open house, including the date and time," Devlin explained. "Now, MLS has added a virtual open house URL so we can put the link right there in the MLS listing. We can then send it to buyers or post it on any social media site."
Book viewings in advance
While all 50 states have emerged from lockdown mode, social distancing measures are still in place that restrict crowding and mandate face masks. For example, while there traditionally is no limit to how many people can be in an open house at any given time, that may not be the case for states looking to curb gatherings.
If you wanted to view a house in person, ask your real estate agent about convenient times to do so that won’t require special Covid-19 precautions. This way, you can really get a feel for the house and can avoid uneasiness about being among many people at once. In a recent survey conducted by Gallup and released in July, 54% of respondents said the lack of social distancing in their area had them worried, up from 45% in mid-May.
Inquire about disclosures
Disclosures are material defects in the house that traditionally cost money to repair. The seller is required to inform potential buyers of these, but you may forget to ask about them or not notice them during a virtual tour. Talk to your real estate agent about this issue.
By adapting to the circumstances of the moment, you can get all the information you need despite the restrictions to make the right decision for you and your family.
What is the real estate agent's role in home buying?
From an informational standpoint, this may be one of the best times in history to be interested in buying a home. Mobile apps, word of mouth and the internet are among the many ways to see what houses are up for sale, what they cost and where they're located.
Yet despite these technological conveniences, many would argue that the real estate agent remains the best source of all. The home buying process has many players, from the buyer, to the seller, to the lender to the inspector to the appraiser. The real estate agent is the tie that binds them all together. Here's how:
Helps you find the right home
Nearly 2 million houses throughout the country are up for sale, according to the National Association of Realtors. That's a lot to choose from, each with its own specifications and distinctions that make it unique. A buyer’s agent specializes in helping you find not only a house, but the right house by asking you a variety of questions that can help narrow down your search. Many people who enter the home buying process don't know exactly what they want to buy but may have some preferences. A buyer’s agent will go over certain issues that can provide guidance.
Common questions include:
Where would you like to live - in the city, suburbs or rural neighborhood?
How many people will be in the house with you?
Is there a particular architectural style of house you like or prefer?
How important is the location to where you live in terms of your work commute?
Do you want a house that is move-in ready or a fixer-upper?
What price range do you want to stay within?
Have you been pre-approved?
The more information they have to go on, the easier it will be for them to show you houses that are to your liking and within your spending comfort zone.
While many big-ticket items can be purchased entirely online - houses included - real estate remains something most people try before they buy. As such, your real estate agent will help you "test drive" a potential home by arranging appointments for you to see it in person. They may do this by getting in touch with the listing agent for the seller or finding out when the next open house is scheduled and coordinating with you to see what times work best.
Discuss your budget
If you plan on taking out a mortgage, conversation on money matters will largely be with your lender, but the real estate agent may also talk about finances with you. They do this to get a general idea of how much you're willing to spend and what is feasible based on your capability. This discussion can further guide them in terms of directing you to houses that you might be interested in buying, or at the very least seeing in person. Being pre-approved by your lender not only tells the real estate agent what price range of a home to show you but also you are a serious buyer.
Serve as a go-between
Generally speaking, sellers seek to maximize their property by getting the highest return for their investment; buyers aim to purchase as affordably as they can. The real estate agents involved help to find the middle-ground so everyone walks away happy. Once you make an offer, your real estate agent will take that number to the seller's agent to see what they think. They may come back with a counteroffer or accept the deal. Your agent may offer recommendations on what they think you should put forward based on their experience, what your budget is and the competition from other potential buyers.
Fill in the details
The biggest aspect of buying a home is, of course, the price. Today, the national median for existing homes is $295,300, based on the most recent figures available from the NAR.
But there is so much more than the list price to consider. There are also property taxes, closing costs, fees, and the history of the property, such as when it was built and the materials used for the basement or roof, for example. In this way, real estate agents are akin to detectives and fill in the gaps so you're more fully informed.
Attend the closing
There are many components to home buying, aside from the shopping process. Closing is among the biggest, which is where titles are reviewed, documents are signed, money changes hands, and the keys transfer from the seller to the buyer. Your real estate agent will be with you here to guide you through it all so nothing gets missed and the transaction is made official. Other attendees may include real estate attorney(s), the seller and their agent, a title company representative and the mortgage lender.
A real estate agent can make the home buying process go a whole lot smoother. Residential Mortgage Services looks forward to working with the one you choose.