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Dear Miss Tuss,
What is a HUD form?
The HUD-1 form (otherwise known as the Settlement Statement) is prepared by
the closing company, is signed by the buyer and seller and sets out what
amounts need to be paid and when. In particular, it lists the names and
addresses of the parties, details of the financing, details of charges, fees
(title insurance fees, search fees, recording fees etc) and property taxes.
At the closing and after the closing, funds will be distributed in
accordance with the HUD form.
Dear Miss Tuss,
I am currently renting, but I am planning on
buying a property sometime within the next year. What do I need to do and
when?
Congratulations on deciding to become a homeowner! The first step when
planning to purchase a new home is deciding how much you can afford to
borrow (I’m assuming that you are not a millionaire). To assist you with
making this process, you should review all your monthly outgoings. Many
websites (including this one!) have mortgage calculators to help you to work
out how much you can afford to borrow based upon your income and outgoings.
I would recommend that you obtain a credit report as early as possible to
check that your credit is as it should be. Identity fraud is highly
prevalent and if your identity has been used fraudulently to obtain credit,
this could seriously delay your application for a mortgage.
Once you have decided to look for a property, the first step is to obtain
pre-qualification for a mortgage. If you find a mortgage with a great
interest rate, you may be able to agree with the lender that the rate will
be valid for 60/90 days (a lock-in agreement).
You may also decide to enlist the services of a buyer’s realtor or agent.
They know the market and can be helpful when it comes to making offers and
negotiating an acceptable price for a property
Dear Miss Tuss,
Do I really need to pay for title insurance?
Title insurance covers your legal entitlement to the property. A lender may
require title insurance to be paid. If they want to foreclose on the
property, they need to know that you are the legal owner of the property and
have insurance just in case there is a defect in your title to the property.
With some forms of mortgage, a lender may accept a title certificate in
place of title insurance. |
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Dear Miss Tuss,
When buying a property, what does the closing involve?
At the closing, title will be transferred from the seller to yourself. The
closing will take place in accordance with the terms of the sales contract
between the parties.
In advance of the closing, you will need to obtain a homeowner’s insurance
policy. A lender will require evidence of this insurance policy before they
transfer your home to you.
You will need to bring to the closing photographic I.D. (normally a driving
license or passport).
If any party cannot attend the closing, then it may be necessary to draft a
power of attorney so that the closing can continue. If you have any
questions regarding the closing procedure, it is always sensible to contact
the realtor/agent or the closing company.
Dear Miss Tuss,
Enough legal stuff, what are the practical things I need to think about when
I move to the new home?
Here are some handy hints so that your moving day is stress free –
- As early as possible, preferably as
part of the sales contract, agree the moving date in writing with the
seller. If you are buying a new house, the same applies, get a final date
by which time the property will definitely be ready for occupation.
- Book a moving company/van/enlist
friends and relatives well in advance of your moving date.
- Sort and pack possessions. Professional
packing materials can be purchased over the Internet. Take advantage of
the home move as a good opportunity to dispose of unwanted items – whether
as a gift to charity or by way of a yard sale. Mark on your boxes what is
in them and where they need to go.
- Contact your doctor, dentist, employer,
child’s school, and utilities companies in advance of your move. Utilities
companies will also need to be contacted with final meter readings. Write
change of address cards before you move.
- Arrange with the Post Office for your
mail to be redirected to your new property.
- Purchase items that you may need as
soon as you arrive at your new property e.g. light bulbs, shower curtain,
post box etc.
- Remember the cat!!
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