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Make Your Move 12

Make Your Move 12

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Published by Bill Taylor

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Categories:Types, Business/Law
Published by: Bill Taylor on Mar 25, 2011
Copyright:Attribution Non-commercial


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This is the twelfth segment in a series on purchasing your home. We have discussed your budget and financial needs, choosing a lender, evaluation of your credit report and credit rating, obtaining pre-qualification and credit approval, the types of loans available, finding a real estate agent, what to look for in shopping for a home, and developing a purchase agreement. We are presently discussing the final steps in getting full loan approval by the lender so you can go ahead with closing the purchase.Last week we talked about the home inspection and appraisal.

In addition, the lender may order a flood certification to see if the house is in a flood zone. If the house is in a flood zone, you will have to have additional flood insurance for the property, since regular homeowner s insurance does not protect against floods. Flood insurance can be expensive.

Another step will be to order a title search or abstract update from a title company or attorney. You have the right to choose the company, if you have a preference. If not, the lender will select one. The title company will research the chain of ownership to see that the property was legally transferred from owner to owner and that there are no other easements or hidden

constraints on the title. Having a clear title means there are no liens or claims against the property.

You will be asked how you want to take title of the property. You may want to consult with your attorney on the best way for you, in your particular situation, to hold title. Sole Ownership is when you are purchasing by yourself and have sole possession of the property. Tenancy in Common is used when you are taking ownership jointly without rights of survivorship, which means that if one of you dies, that person s portion passes to his or her heirs, not the joint owner. Tenancy by Entirety, not available in all states, provides for rights of survivorship between husband and wife. If one dies, the property transfers directly to the other owner. Finally, Joint Tenancy allows multiple owners to own property together with rights of survivorship, with ownership passing directly to the remaining owners upon the death of one.

A survey may be ordered by the lender, the real estate agent or the closing company. The three most common types of surveys for mortgage loans are the location, boundary or elevation survey. A location survey locates one or two corners of the property and house and the resulting drawing is based on measurements from those points and is only a close approximation. With a boundary survey, the surveyors will locate all corners of the property, house, and any other buildings or improvements. The drawing shows the exact measurements and locations of improvements and is guaranteed to be accurate. This survey, of course, is more expensive then the location survey. Finally, an elevation survey is used to show the location and heights or elevation of all corners of the property, house, and other improvements. Elevation

surveys are used for new construction and determining possible flooding. Elevation surveys are the most expensive of the three.

Once all of the inspections, appraisal, certifications, and verifications of your information and the property are in, the final underwriting review will be done. Occasionally an underwriter may ask for more information or documentation before giving that approval. A loan will not be allowed to close until everything meets the underwriting requirements. If the requirements cannot be met, your loan could be denied, and your purchase of the property would probably not be able to go through.

Make sure that you get specific details about any conditions that you have to meet and what documentation would be acceptable.

Next we will talk about closing the loan and taking possession of your new house!

Bill Taylor Weston County Extension Office The University of Wyoming is an equal opportunity/affirmative action institution.

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