“You’ve got to know when to hold ’em Know when to fold ’em Know when to walk away And know when to run You never count your money When you’re sittin’ at the table There’ll be time enough for countin’ When the dealin’s done.” – Kenny Rogers
Mortgages are a bit like gambling. You never know when the “perfect time” to initiate a new mortgage is, because there is always a risk that interest rates could go down slightly right after you sign the documents; however, there is always a risk that rates could also rise. The good news is that you can always refinance if rates drop, so unlike gambling, you can “fix” a bad hand.
Right now is a great time to buy (or refinance if you haven’t already done so). Mortgage rates are still really low and housing prices have stabilized. Of course, nobody wants to pay more than they have to for their home. Here is how to “win” the mortgage game:
1. Connect with a really good loan officer.* He or she will help you to obtain the best mortgage rate available based on your income, liabilities, assets and credit score; 2. Correct your credit score, if needed; 3. Consider a 15 year mortgage instead of a 30 year. The monthly payments are often only slightly higher, but you can save a ton of money by minimizing how many years you are paying interest; 4. Take your pre-approval and start looking for a new home with a realtor; and 4. Retain an awesome attorney to close your mortgage!
Curious about the current mortgage rates? Check out this website: https://themortgagereports.com/47095/mortgage-rates-today-january-21-2019-plus-lock-recommendations
Wondering about how much a mortgage might cost? For a ball park range only, peek at this one: www.mortgagecalculator.org
If you just want to listen to Kenny Rogers: https://www.youtube.com/watch?v=UyARoGIzmKk
As always, please let us know if we can help with a real estate or any other legal matter.
Regards, John & Faye * If you are in need, we are happy to recommend a really good loan officer.
While driving through the Baltimore/ Washington D.C. area, there was a billboard that said, “Don’t get a divorce…get a bigger house.” Four days later, the advertisement is stuck in my head.
Although we are all for buying the house of your dreams, it will not save your marriage. What really happens to your house in a divorce?
1. The marital home is the most sought asset during a divorce. At the beginning of the divorce process, everyone wants to keep the marital home; however, it is rare that that both parties can afford to keep the home on their one income, often determining who could actually keep the house;
2. One spouse keeps the house. If one of the parties can afford to keep the home, they should refinance under their own name and based on their individual income. At the time of refinance, the ownership is often transferred by Quitclaim Deed;
3..Get your name off the mortgage if you don’t own the house. If you have signed a Quitclaim Deed to relinquish ownership rights, make sure that you don’t have any financial responsibility for the mortgage or taxes. We recommend this for both security (in case your ex doesn’t pay the mortgage for any reason) and because any financial obligations will limit your ability to secure your own credit for a future rental or purchase;
4. Sell the house. This can be done either before or after the divorce occurs, but it’s easier if the parties agree how the proceeds will be divided before the house is put on the market;
5. It gets more complicated when the mortgage exceeds the value of the home. Couples that cannot afford to pay the overage due usually have to choose a short sale, renting the home or continuing to live together;
5. Buying a house during the divorce process isn’t always a great idea. The home will be considered a marital asset and subject to division. Also, mortgage underwriters may be a bit concerned about your future income and assets, which could cause delays.
As always, please let us know if we can assist you with any concerns or legal matters.
We recently read Duct Tape Marketing Revised and Updated by Josh Jantsch.*** As you might expect, the book is filled with creative marketing ideas. The book highlights an important part of our knowledge base that we wish people would use more often: referrals.*
We know a lot of people. Tons. Although most people in a field can do the same work for you, some truly set themselves apart by going the extra mile for their clients; we are happy to point you towards professionals who run a marathon.
We have spent years building these strong relationships and friendships. Do you know any realtors who have helped sellers get ready for a yard sale or told buyers where to do goat yoga, find amazing ethnic food and catch their favorite fish? We do! Do you know a CPA who isn’t afraid to give candid tax advice AND who will return your phone call on April 14th? We know someone! How about a family therapist that works with children coping with their parents’ divorce? Yes, we know some local practitioners that we really respect. How about a mortgage lender who always answers calls and emails within the hour or who attends all closings just to say “thank you” to the buyer? We work with some amazing, local lenders that we would love to introduce to you! Do you need help from someone who has an expertise in an area of law that we don’t? Yes, we know other lawyers too. If you ask, we will even give you a referral for the best salad with grilled chicken, which is a lunch time favorite in the office, in North.
Please don’t be afraid to ask.
John & Faye
*** Long before we read the book, one of our realtor friends got us thinking about writing a piece about referrals. He was working on the other side of a transaction and called our office late afternoon on a Friday to ask a quick question. We called back a little bit later from a cell phone. We didn’t think anything of it until he asked, “This is your cell phone number? You don’t block your number when you call realtors?” When we answered that it was and that he should always feel free to call us on it, he seemed surprised; something so simple was missing in his previous lawyer referrals and it was, apparently, something that he had accepted as normal. Maybe it is the norm and we aren’t normal (insert so many wise cracks here). Maybe we raised the bar and ruined other attorneys for him, but we are thrilled to have earned his respect, adoration and referrals, just by just being ourselves.
What is Earnest Money? Buyers typically give a deposit when they make an offer on a house. The money is provided to demonstrate that you are “earnest” or serious about buying their home. The amount of earnest money given usually depends on local custom, but a serious buyer might opt to give more to show commitment.
In most cases, the earnest money goes towards the eventual purchase of the house; however, there are two primary scenarios where you Buyers might have earnest money returned:
1. Rejected offer. If you make an offer to buy a house and the seller turns it down, they are required to give you the earnest money back; OR
2. Contingencies. When you make an offer to buy a house, the offer is usually contingent upon certain things, like a home inspection. If the inspection uncovers a serious flaw which is unacceptable, can’t be fixed, or the seller is unwilling to fix, you will also get your money returned.
To the contrary, if you back out of the Offer or Purchase and Sales for no good reason (ex. you decide you just don’t like the house or location), you might forfeit your earnest money. Like so many things in the law, we look at the return of earnest money on a case by case basis to determine what is right or just.
As always, please feel free to contact us with questions that you may have about this or any other legal issues.
Disclaimer: The material contained in this website does not constitute legal advice or a legal opinion as to any particular matter. Nor is it intended to create an attorney-client, business or professional relationship. You should not rely on the information contained in this website without first speaking with an attorney. No claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this website are made. This material may be considered advertising under the rules of the Supreme Judicial Court of Massachusetts.