What is the time period from contract to settlement?
The time period from contract to settlement can be anywhere from 30 to 90 days, depending upon the needs of the seller and buyer.
What are closing costs?
Closing costs are additional monies needed at the time of settlement. Closing costs are in addition to your down payment. Closing costs consist of searches, title insurance, survey, mortgage application fees, points, recording costs, and attorney’s fees, if applicable.
What are prepaid costs?
Prepaid costs are monies used to set up escrow accounts. The monies in these accounts are used to pay quarterly taxes and yearly homeowners’ insurance premiums.
What is the attorney review period?
As per an agreement between the NJ Bar Association and the NJ Association of Realtors, any contract, which is drawn by a NJ licensed real estate person, must contain a 72-hour attorney review period. Once all parties, i.e., buyer and seller, sign a contract and each party has a fully executed copy, the 72-hour attorney period begins. During this time period, the contracts may be reviewed by an attorney representing the buyer and/or the seller and may be declared null and void by either attorney if it is unacceptable to either party. If the attorney desires, he may suggest certain changes to the contract that would be acceptable to all parties that would reinstate the contract with appropriate changes being approved by both parties.
What is mortgage insurance?
There are different types of mortgage insurance. Government loans such as FHA require MIP (Mortgage Insurance Premium) and conventional loans with a down payment less than 20% require PMI (Private Mortgage Insurance). These premiums are paid monthly, in addition, to your principal and interest payment.
What is the difference between mortgage insurance, as stated above and mortgage insurance, which would satisfy the balance of the mortgage upon the demise of either of the homeowners?
Mortgage insurance, which would satisfy the balance of the mortgage upon the demise of either of the homeowners, is optional and is purchased through a life insurance policy from an insurance agent. The value of the insurance is determined by the amount of the mortgage that you originate at the time of purchase.
What are searches and title insurance?
When a home is purchased, the buyer obtains a title insurance policy. The title company contracts an individual, a title searcher, to travel to the county clerk’s office and search the back title of the property in question. This review of back title will indicate what liens are filed against the property in question. These liens must be removed prior to the new purchaser taking title. Title insurance is an insurance policy that protects the purchaser and the mortgage holder against any liens that were not found by the title searcher. If a claim were made against the title, after the purchaser takes title to the property, the title insurance would satisfy any claims.
Is it necessary to have homeowners insurance?
Any mortgage company that grants a mortgage to a purchaser will require homeowners insurance. This insurance will satisfy the mortgage if the property is destroyed. Personal affects and contents may also be covered by the homeowner’s policy. Homeowners insurance is paid in full for one year prior to purchaser taking possession of the property.
What is a settlement statement also known as a RESPA statement?
The settlement statement is an accounting of all funds used in the purchase and sale of the subject property. The settlement statement is broken down into two sections, the buyer’s section and the seller’s section. Each section will contain all of the charges and/or credits incurred by either the buyer or seller.
