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Closing A Real Estate Deal

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For those of you are not familiar with term, the closing of a real estate deal is the process that makes the house yours. When you have signed the papers and finished with all the other required paperwork, the deal is closed and the house you are buying is officially yours. The closing of a real estate deal can be a difficult process. Many things can go wrong. It is essential that you understand how you should proceed.

Title Search:

Title Search

It is always a good idea to carry out a title search and get title insurance. This will ensure that you never have to worry about any third party laying claim on the property in the future. You should get the help of a title officer who will check to make sure there are no clouds over the title.

Attorney Help:

It is advisable that you get the services of an attorney. Common people can hardly ever understand all the closing documents. So, it is a good idea to have a real estate attorney at hand.

Escrow:

Many things can go wrong in a deal and cause financial loss to one of the two parties involved. So, it is advisable that an account be held by a third party, holding all the papers and money. This account is called an escrow.

Negotiate Costs:

Escrow companies can rip you off if you are not in the habit of negotiating. They can include junk fees and you have to fight them out to have the extra fees removed.

Renegotiating the Offer:

If any inspections reveal that repairs have to be carried out in the property, then you can renegotiate the final offer. You can do this even if a final purchase offer has been accepted.

Home Inspection:

It is going to be very stupid of you if you close out the deal without having a home inspection first. Read the full story

Drawbacks of Reverse Mortgage

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Reverse mortgage is the ideal tool for retired or elderly citizens to take out an income in any form i.e., installments or lump sum by putting equity which they have raised in their homes. It is really helpful for elderly citizens who are in great need of income to meet their everyday expenses, but still it has some drawbacks. These drawbacks are listed below:

High Fees & Charges

Reverse Mortgage

Individuals taking out reverse mortgage loan putting the equity on their home, but still banks charge them a high fee to initiate their transactions. In reality, ReverseMortgage.Org stated that as a portion of a reverse mortgage, homeowners may sometimes be required to pay of an initiation fee that is $2,000 or 2% of the total amount of loan. Many homeowners add this fee into the amount of loan and pay off it with interest on loan over the term of loan.

In addition to this fee, there are several other fees that homeowners are required to pay off. These fees include appraisal fee that can be of several hundred dollars, a recording and credit report charge that is about $200, a flood certification and a pest inspection fee that is about $150. Homeowners may be responsible to buy mortgage insurance coverage and for this they have to pay off a service fee that ranges from $30 to 435 per month.

Transfer of Your Family Home to Your Children

Usually parents want to pass their family home onto their offsprings. However, with reverse mortgage even though the lenders do not take the home’s title, borrower has to pay off the mortgage within a given period of time with interest. In most of the cases, borrowers repay the loan by selling their home and after that they turn over the proceeds or a part to their bank.

Many families buy an insurance coverage on the homeowner and they use their adult child or the lender as the beneficiary. This strategy helps such families to repay the bank without having to sell their home upon the death of the homeowner. It is advisable to you to consult with an authentic and expert insurance agent to find out the best option to make sure that if such insurance policy is good enough to fulfill the outstanding debt.

Affect on Future Financing Abilities

An individual is said to be creating a big liability when they start a reverse mortgage. It is because they have to repay the loan with interest. However, many borrowers do not realize that they are more likely to hurt their future financing ability by establishing a reverse mortgage.

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April 2012
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