Real Estate Information Archive

Time Saving Tips for Getting Started on Your Home Purchase

Buying a home or second home today can be a complex and stressful process, but it doesn’t have to be. With a little preparation, you can save a lot of time and hassle by having all of your documents ready when your mortgage professional needs them.

Understanding the process and the items required today for a mortgage certainly helps save a lot of time and energy.

To start with, the lender will need personal information to verify employment for you and your co-borrower (if there is one). They will also need Information regarding all of your debts and assets in order to expedite the paperwork process, start gathering the following items:

• Most recent pay stubs for one month.

• W2's from the last two years.

• Signed copies of your last two years

• Tax returns, including all schedules that were filed.

• Homeowner's insurance company name and number. (If you already own a home)

• Most recent bank statements for two months. (All pages)

• Most recent statements from any retirement and investment accounts for two months. (All pages)

So, what costs are involved?

Within 3 days of your application, your Loan Officer must provide you with a good faith estimate of closing costs. Along with any down payment you may have to pay closing costs at your closing as well. This is a brief rundown of some of the fees that could be associated with your new mortgage:

• Application/Processing FH -Charged by the loan officer to process your loan application.

• Appraisal Fee-Charged by the appraiser to determine the current value of the property.

• Closing Fee - Charged by the closing agency (escrow, attorney, and tittle) to ensure the close of your transaction.

• Credit Report Fee - Charged by the credit reporting agency to provide your credit report to your loan officer and/or lender.

• Title Search/title Insurance Fees - Charged by the title company to ensure the property is free from liens or title defects.

• Origination Fee - Paid to the originator to obtain a lower interest rate. This is usually expressed in the form of points. One point equals 1% of the loan amount.

• Discount Points- Paid to the lender to secure a lower interest rate.

• Miscellaneous Fees-VA and FHA loans may have other fees associated with them. Private Mortgage Insurance (PMI), document preparation, notary, recording and tax service are other fees which may fall under this category.

We can help you find a mortgage lender to help evaluate your personal situation and assist you in finding the loan program that works best to meet your individual goals and needs.  Just give us a call!

Audrey & Frank Serio, CRS

REMAX By The Sea

Bethany Beach DE 19930

Direct: 302.537.3171

Frank@TheSerios.com

A Daily Email List of New Homes for Sale as they Hit the Market in Bethany Beach – Fenwick Island and the Resort’s Surrounding Areas!

Just Click Here…

What Is Freeboard?

Recently there has been a lot of discussion in coastal communities all over the United States on the subject of rising sea levels and the impact on homeowner’s flood insurance coverage.  This conversation is not just limited to towns here in the Bethany Beach and Fenwick Island communities but across the nation.

FEMA is “highly” recommending (note FEMA does not require towns to act but the towns will lose their eligibility for flood insurance if they do not comply) that towns adopt building codes that require homes to be built above Base Flood Elevation (BFE) and to add Freeboard (see definition below) to better protect the homeowner in the case of higher than calculated flood levels.

Understanding the severity of the issue and rising sea levels virtually all coastal communities are meeting the recommendations from FEMA.  It is important to note that today's floodplain is not necessarily tomorrow's floodplain.

Definition of FREEBOARD by Merriam Webster Dictionary;

1 :  the distance between the waterline and the main deck or weather deck of a ship or between the level of the water and the upper edge of the side of a small boat

2 :  the height above the recorded high-water mark of a structure (as a dam) associated with the water

FEMA Defines Freeboard as;

Freeboard is a factor of safety usually expressed in feet above a flood level for purposes of floodplain management. "Freeboard" tends to compensate for the many unknown factors that could contribute to flood heights greater than the height calculated for a selected size flood and floodway conditions, such as wave action, bridge openings, and the hydrological effect of urbanization of the watershed. Freeboard is not required by NFIP standards, but communities are encouraged to adopt at least a one-foot freeboard to account for the one-foot rise built into the concept of designating a floodway and the encroachment requirements where floodways have not been designated. Freeboard results in significantly lower flood insurance rates due to lower flood risk.

 Elevation;

Communities must require that all new construction and substantial improvements of residential structures within Zones A1-30, AE and AH Zones on the community's Flood Insurance Rate Map (FIRM) have the lowest floor (including basement) elevated to or above the Base Flood Elevation (BFE). Common elevation techniques include elevation on file, elevation on piles, piers or columns, and elevation on extended foundation walls such as on a crawl space.

In areas designated as Zone A, the community must obtain, review, and reasonably utilize BFE data available from a Federal, State, or other source and use these data as criteria for requiring that new construction and substantial improvements of residential structures have the lowest floor (including basement) elevated to or above the BFE.

All new construction and substantial improvement in Zones V1-30, VE, and also Zone V (if BFE data is available), must be elevated on pilings and columns so that the bottom of the lowest horizontal structural member of the lowest floor (excluding the pilings or columns) is elevated to or above the BFE.

For residential structures in AO Zones, the lowest floor (including basement) must be elevated at least as high as the depth number specified in feet on the community's map, or at least two feet if no number is specified.

For additional information please visit StormSmartCoasts article;

Using Freeboard to Elevate Structures above Predicted Floodwaters

And the following link;

Raise Your House, Lower Your Payments provided by the DNR of Maryland

Audrey & Frank Serio, CRS

REMAX By The Sea

Bethany Beach DE 19930

Direct: 302.537.3171

Frank@TheSerios.com

A Daily Email List of New Homes for Sale as they Hit the Market in Bethany Beach – Fenwick Island and the Resort’s Surrounding Areas!

Just Click Here…

Buyers and Sellers in Delaware are going to see an increase in the Title Insurance rates beginning March 1, 2015.  Buyers and Sellers should ask their agent about this increase so that they can properly estimate the necessary closing costs for their real estate transaction.  It can get complicated, but here is a summary of some of the more important points.

In Delaware the settlement attorney is usually an agent for a title insurance company.  They base the estimate on the premium for the Owner’s title policy.

1.      The owner’s rates are shown at the bottom of the second page of the attachment which is from page 4 of the manual.  Many lawyers encourage their clients to obtain the Enhanced Homeowner’s Policy for an owner occupied home. The premiums for the Homeowner’s Policy are 20% more, but then there is not an additional charge for endorsements (see item 3 below).

2.      Then add $25.00 for the simultaneous issue of the Loan Policy for the lender.

3.      Most lenders request certain endorsements to the title policy.  For your typical residential home settlement it would be good to estimate for three endorsements at $50.00 each totaling $150.00.

4.      Closing Protection Letter is now $125.00. (Formerly $75.00)

5.      If a title policy has been issued in the past 5 years, there is a reduction in the standard rates of approximately 40% up to the amount of the previous policy.   

Your Lender will be updating their systems to reflect the new changes in their Good Faith Estimates.

Lenders will be updating their systems to use these new rates for their good faith estimates of closing costs.

. Click here for a few pages from the new rating manual.

Audrey & Frank Serio, CRS

REMAX By The Sea

Bethany Beach DE 19930

Direct: 302.537.3171

Frank@TheSerios.com

A Daily Email List of New Homes for Sale as they Hit the Market in Bethany Beach – Fenwick Island and the Resort’s Surrounding Areas!

Just Click Here…