Q. What’s the answer to the home or condo inspection problem?
A. Every buyer has to get a home inspection. I require it on all deals, especially newer properties. I do this because people often pay extra simply because the house is new, even though it may not be in excellent condition.
Home inspectors are the best bargain in the closing process. The ones our New Jersey real estate lawyers recommend will give you a detailed report on all conditions of the house. They will even let you accompany them on the inspection so you can learn how everything works.
Q. How much will closing costs be?
A. These aren’t really costs. Closing costs are actually advance payments for your interest and taxes. After the closing, you won’t have to pay your mortgage until two months later. When you make a mortgage payment, it is always for the previous month. So if you have a mortgage with a big monthly payment, figure that is the estimate of what you will pay the closing. You also have to pay 1/12 of your taxes with every mortgage payment.
Q. Do I need a New Jersey real estate attorney?
A. In Northern New Jersey, a real estate lawyer controls, supervises and is responsible for everything that happens at a closing. In New Jersey, the attorney is responsible for the contract, informing you of the process, the scheduling, the mortgage commitment, the title, home inspection issues, etc. In North Jersey, the real estate attorney’s job is to do everything to protect the client. This is why we require a personal meeting with the clients at the beginning of the process to make sure we understand your needs and to better plan, schedule and protect your investment.
Q. Why don’t buyers need surveys in North Jersey?
A. The main reason people order surveys is because lenders insist on them. They aren’t necessary and are usually very expensive. If possible, skip it and you’ll save yourself $400.00 to $1,000.00.
Q. What about home insurance?
A. Home insurance is a bargain. It covers everything from fire damage to liability if someone is injured on your property. You should always ask for replacement value–it’s a little extra but well worth it. If you get a mortgage, you’re required to also name an insured, the lender. Just simply call your agent to add the lender’s name. So if there is damage, they get paid.
Q. What’s the difference between a fixed and adjustable rate mortgage?
A. In a fixed rate mortgage, the interest rate is locked the moment you close the loan. In other words, regardless of fluctuating interest rates or inflation, your interest payment and monthly principal will stay the same. On the other hand, adjustable rate mortgages will change according to interest rates. This can often mean you have to make higher payments over time. As a general rule, you should select an adjustable rate mortgage if you think the rates will stay the same or decline or if you plan to move in the near future. You should choose a fixed rate mortgage if you plan to live in your home for a while; you believe the payment suits your financial situation; or if you want assurance that your rate won’t change.
Q. What is a firm commitment?
A. This is the lender’s promise to give you a stated amount of debt under specific terms. If you do not fund the loan before the end date, it will expire and you may be subject to a cancellation fee. If you want to keep the loan, you must re-apply. However, the new loan will differ from the previous one especially with respect to the interest rate.
Q. What is a conditional commitment?
A. A conditional commitment means the lender will offer the loan providing specific conditions are met. Problems often arise with conditional commitments if the requirements are not met in a timely fashion. This can prolong escrow or cause a sale transaction to fall through.
No associates or newer attorneys will be handling your closing. I personally handle each and every closing. I can guide you through the process of buying a home from our initial meeting to the closing. While my great office staff assists, I handle all problems. If you are interested in buying a home in New Jersey, contact us today.