September 5, 2010

Refinancing Your Mortgage and Cost Savings

Mortgage interest rates are still at all-time lows, and so a lot of people who refinanced a few years ago are doing it again. One question that comes up a lot is: “Because I refinanced not too long ago, is there anything I can save money on this time around?”

The simple answer is “yes.” The first thing that should be reduced is the cost of the title search. Last time, a full search was necessary, going back way before you became the owner. Now that you’re refinancing again, all that needs to be searched is the period of time between the date you became the owner and the date of settlement.

The second thing you can save money on is title insurance. When you refinance, you won’t need to get owner’s title insurance again. Instead, all that’s required is lender’s title insurance. Assuming the amount you’re borrowing is not greater than the amount you borrowed last time, you will save 40% off the cost of title insurance. If your new loan amount is higher than your old loan amount, then you save 40% on what the premium would be for the same amount, and then you pay regular rates for the excess.

Here’s an example. Let’s say that the premium for lender’s title insurance for a $300,000 loan is $650. If you borrowed $300,000 or less last time, you would save 40%. Instead of paying $650, the cost would be $390. However, if you borrowed $300,000 last time and you’re borrowing $375,000 this time, you would pay the discounted rate on the first $300,000, or $390, and you would pay the full rate for the difference between $300,000 and $375,000.

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Posted In: Refinancing

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July 29, 2009

Shopping For A Mortgage

On July 29, 2009, the Federal government issued a publication called "5 Tips For Shopping For A Mortgage." Although these tips may seem obvious, you'd be surprised how many people don't follow them.

One tip is to get advice from somebody who knows what they're doing - somebody you can trust. As a Delaware real estate lawyer, I find that most of my clients contact me after they've already been approved for the mortgage. At this point, it's kind of late to start asking questions about how your mortgage loan will work, or what fees you'll be paying. There's absolutely no reason for you to struggle through the application process by yourself when you can get your attorney to review what you're doing and offer helpful advice.

Another tip is to actually shop around for the best deal for you. This could save you thousands of dollars. How do you shop for a mortgage? Check out these suggestions.

Posted by Charles Snyderman | | Email This Post

Posted In: Refinancing

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March 21, 2009

Mortgage Interest Rates Keep Going Down

Refinance ...Buy a new house...Interest rates... Mortgages. These words are in the news every day. How low are interest rates on mortgages? They haven’t been this low since 1965. To put this in perspective, check out what it cost to buy things in 1965:

gallon of gas - 31 cents
loaf of bread - 21 cents
dozen eggs - 53 cents
postage stamp - 5 cents
average cost of new car - $2,650

Unless you plan to move in the near future, it’s time to jump on the bandwagon. If you live in Delaware and you’re interested in starting the process of refinancing, your first step is to pick a mortgage company. Don’t make the mistake of thinking that your present mortgage company will give you the best deal. Believe me - it pays to shop around for rates.

You’ll need an attorney to handle your closing, and I always recommend contacting the attorney early on in the process to help with procedures and questions. Be sure to ask the attorney if there will be a fee charged if you don’t get approved for the mortgage.

This article is part of a series of articles dealing with refinancing your mortgage.

Posted by Charles Snyderman | | Email This Post

Posted In: Refinancing

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March 4, 2009

Choose Your Own Delaware Real Estate Lawyer


If you own a house in Delaware and you're about to refinance your mortgage, you have to have a Delaware attorney represent you. But, you have the absolute right to choose your own Delaware attorney regardless of any recommendation you might receive from your loan officer.

This article is part of a series of articles I've written about refinancing in Delaware.

This right to choose your own attorney is so fundamental that if you are referred to an attorney by someone who works for your lender, that attorney is required to inform you, in writing, that you have the absolute right (regardless of any preference that the lender may have and regardless of who is to pay attorney's fees) to retain a lawyer of your own choice to represent you throughout the transaction, including the examination and certification of title, the preparation of documents, and the holding of settlement.

The attorney who you are referred to must also inform you of the identity of any other party having an interest in the transaction whom the lawyer may represent, including a statement that such other representation may be possibly conflicting and may adversely affect the exercise of the lawyer's professional judgment on your behalf in case of a dispute between the parties. In this connection, a lawyer is deemed to have a "possibly conflicting" representation if he represents the lender or has represented the lender on a continuing basis in the past.

So if you’ve used an attorney in the past, or if a friend or relative recommends an attorney, and you’d like that attorney to handle your next real estate transaction, don’t feel pressured into using a different attorney just because your lender suggests that you somebody else.

Posted by Charles Snyderman | | Email This Post

Posted In: Refinancing

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February 20, 2009

Refinancing Delays

As a Delaware real estate attorney who’s helping many previous clients and new clients with refinancing their mortgages, I’ve begun to see an alarming trend among lenders. The loan officer notifies the customer that the mortgage has been approved, and that it’s now okay to schedule the closing. The customer calls me and we agree on a closing date. Payoffs are ordered for that date, and my client makes arrangements to take off work and have someone watch the kids.

The day before the closing, and sometimes the same day, the mortgage company calls to let us know that they’re not ready, and that the closing has to be postponed for a few days or even a few weeks. This is especially frustrating for those clients who are expecting to get cash back from their refinancing so they can pay bills. It's also a little worisome if you're facing the expiration of your rate lock.

Under these circumstances, my recommendation is to keep in touch with your loan officer on a regular basis. Email is really the best way. Each time you write, ask if there are any conditions that have not yet been met, and if there’s anything you can do to move matters along.

Once a closing date has been scheduled, again write to your loan officer letting them know the date of the closing, and reminding them how important it is to you for them to honor that date.

Posted by Charles Snyderman | | Email This Post

Posted In: Refinancing

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January 28, 2009

Refinancing The Mortgage On Your Delaware Home - Whose Names Will Be On The Mortgage?

With some married couples, their house is owned by only one of them because the other spouse doesn’t have great credit. The purpose of this article is to explain that poor credit is not a reason for your spouse to be deprived of home ownership.

In order to get the most of this article, you need to understand the difference between a Note and a Mortgage. The Note is your written promise to pay back the money you're borrowing from your lender. The Mortgage, on the other hand, is a lien against your home which gives your lender collateral backing up your promise in the Note.

The Note is signed by the individual who has to pay back the loan. The Mortgage is signed by whoever owns the home.

When you apply with the mortgage company, let’s say they tell you that your spouse can’t be on the mortgage due to credit issues. What they really mean is that your spouse can’t be one of the “borrowers” whose credit determines whether the loan will be approved. Again, that's the person who will sign the Note. When your mortgage company says your spouse can’t be on the mortgage due to credit issues, they don't really mean that your spouse can't be on the mortgage document that gives then collateral backing up your promise to pay.

Let's take a look at two scenarios.

#1. Husband is the sole owner of the house. He signs the Note promissing to repay the loan. As the owner, he signs the Mortgage as collateral for his promise. On top of that protection, the mortgage company is also given title insurance.

#2. Husband and wife are both owners of the house. Husband signs the Note promissing to repay the loan. As the owners, both husband and wide sign the Mortgage as collateral for husband's promise. On top of that protection, the mortgage company is also given title insurance.

In both scenarios, the mortgage company has the husband's promise to pay back the loan, and it also has the house as collateral.

Based on all of the above, if your spouse is not on the Deed to your house, it might make sense to use the occasion of refinancing to have your spouse's name added to the Deed. You're real estate attorney can get this done for you.

Posted by Charles Snyderman | | Email This Post

Posted In: Refinancing

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Charles Snyderman

Charles Snyderman

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