Guide to Home Buying · prepared this guide for you. Your choice of a real estate agent, loan officer and title company is as important as your choice of which home to buy. Finding

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Guide to Home Buying

www.footetitlegroup.com

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http://www.footetitlegroup.com/




Meet Foote Title Group Foote Title Group has proudly served Southern Maryland since 1986. We do

all types of settlements. If your purchasing a home, refinancing your current

home, buying a piece of land or building a home we are here to help you

with all of that. We work hard to make the process simple for you and keep

you in the loop every step of the way. Each of our team members are

dedicated to helping you with every step to ensure your closing is the simple

part.

Over the last 30 years we have worked with the area’s most successful real

estate agents providing them with high quality timely service for each of

their customers. At Foote Title Group we are aware that each person is

unique, whether a first-time home buyer or a seasoned investor, we are give

attention to every detail of each transaction.

Foote Title Group is approved by the nation’s largest lenders and maintains a

reputation of efficient processing and high standards throughout our industry.

This ensures that you and your lender will most definitely be completely

satisfied.

because your home closing should be the simple part!

licensed in Maryland & Virginia

!

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Purchasing a Home - A Guide for the Buyer

Getting Started The first step in the home buying process is selecting a real estate agent. The real estate agent that you pick will help you find your dream home. The home that fits your wants, needs and your budget. Your agent will guide you through the entire home buying process, and be able to explain any questions and address any concerns that you may have along the way.

Finding Your Home Before you meet with your real estate agent, you may want to write down a list of requirements and wishes that you are looking for in your dream home. This will make finding your dream home easier. Once you and your agent have discussed the what you’re looking for and the areas and neighborhoods you want to live in, as well as your price range, your agent will compile a list of homes that meet your wants and needs. Your real estate agent will then show you all of the homes they find and help you understand each of them. When you find the right one your ready to make an offer on it!

Preparing a Contract Once you have found that dream home its time to make an offer. Your agent will prepare a written offer detailing the specifics of your purchase. Once completed and signed by you, your agent will then present the offer to the Seller's agent, who will present it to the Seller. The Seller will have three options:

1. The Seller may accept your offer and sign the contract, which willmake your contract a Ratified contract.

2. The Seller may make a Counter Offer by modifying one or more of theterms of the contract. (You then have the option of accepting the Seller's counter offer, countering the Seller's counter offer or rejecting the Seller's counter offer, thus nullifying the contract.)

3. The Seller can reject your offer.Once the contract has been signed and ratified, its then forwarded to Foote Title Group where we begin the process pulling your homeownership together and preparing for Closing.

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Finding Your Loan After the contract is finalized, you’ll need to find a mortgage person you want to work with and apply for a loan to purchase your dream home. The selection of the Lender and the loan officer is very important to ensure a smooth process and closing. Your real estate agent will be able to suggest names of loan officers that they have successfully worked with in the past.

Settlement /Closing Settlement is when the purchase of your home is completed. The role of Foote Title Group is to coordinate all of the various parties in the transaction, examine title search to the property, conduct the settlement and complete all necessary post-settlement work. A more detailed explanation can be found under the title The Settlement Process.

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PURCHASING A NEW HOME

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CELEBRATING YEARS

FINDA REALTOR

DETERMINEWHAT YOU

CAN AFFORD

MAKE ANOFFER ON

THAT HOME

MAKE LOANAPPLICATION

INSPECTIONSARE ORDERED

CONTACTTHE UTILITIES

CLOSE WITHFOOTE TITLE

GROUP

TELL YOUR AGENT YOUCHOOSE FOOTE TITLE GROUP

FOR CLOSING

GET HOMEOWNERSINSURANCE

FINALINSPECTIONAND WALK THRU

SETUP YOURCLOSING WITH

FOOTE TITLEGROUP

FINDA LENDER

SELLER ACCEPTSYOUR OFFER

MEET WITHYOUR LENDER

YOUR MORTGAGEIS APPROVED

TITLE SEARCHIS ORDERED

MOVE IN TO YOURDREAM HOME!

FIND YOURDREAM HOME


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The Sales Contract

All Real Estate contracts must be in writing. Both the Buyer and the Seller have to agree to all of the terms and complete signatures and initials where they are required. A contract is not binding until everyone has fully signed and initialed. Any verbal promises or agreements are not enforceable.

Your Realtor will have all of the necessary forms to prepare your offer to purchase your dream home. These forms contain all information and disclosures as determined by all federal, state and local laws and regulation. Your Realtor will provide you with the proper and necessary forms to ensure a complete contract, determined by the location of the home you wish to produce.

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Your Search for a Title Company

Buying a home may be the single most important investment you will make. It is critical that you understand the process and your options so that you can make an informed and rational decision on every aspect of the home buying process. This is why we have prepared this guide for you. Your choice of a real estate agent, loan officer and title company is as important as your choice of which home to buy. Finding the right professionals who understand your needs and preferences can make the difference in whether your experience is smooth and efficient or lengthy and difficult. It's worth the effort to do your research - talk to your friends and business associates for referrals. Your real estate agent can also refer you to a Lender and a title company with whom they have had successful transactions and provide the excellent service you deserve. At Foote Title Group, we welcome your questions. Not only are we happy to answer any questions regarding our fees and services we perform, but we can also help you understand or solve most of the problems which occur during the home buying process.

When choosing a title/settlement company, don't just compare prices - compare services. Most title companies will offer a basic range of services. These "basics" may include preparation and recordation of the closing documents and disbursement of funds. Title companies who only offer these basic services may appear cheaper - but you should ask yourself whether your best interest will be served by cutting corners.

1. Will the title company work with your Lender to avoid scheduling problems, to makesure all title and survey requirements are met, and to resolve any unresolved orunexpected issues at settlement?

2. Will the title company work with your real estate agent to ensure compliance with thesales contract and to alert them of any potential title or survey problems?

3. Will the title company work with you to answer questions you have about the closingdocuments or the settlement process and provide you with your final settlement chargesas soon as possible before settlement?

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The Loan Process

Items Commonly Required For The Loan Legible copy of the sales contract including all addends signed by everyone. Social Security Number of all borrowers. Complete addresses for the past 7 years (including complete name and address of landlords for the past 24 months). Name, address and all income earned from all employers for the past 24 months. Copies of W-2 forms for the last 2 years. Copy of most recent year-to-date pay stub. Name, address, account number, monthly payment and current balance for installment loans, revolving charge accounts, student loans, mortgage loans and auto loans or any other outstanding debts. Name, address, account number and balance of all deposit accounts, including: checking account, savings accounts, stocks, bonds, etc. Three months most recent statements for deposit accounts, stocks, etc. If you choose to include income from Child Support/Alimony bring copies of court records or cancelled checks showing receipt of payment.

If you are applying for a VA Loan:

DD-214, Certificate of Eligibility or statement from your Commanding Officer if you are onactive duty.

If you are self-employed or paid by commission:

Previous two years Federal Income Tax Returns with all schedules and a year-to-date profit and loss statement.

If you own other properties:

Address of properties and current market value. Any loans on those properties; Lender's name, address, account number, monthly payment and current balance. Copy of Federal Tax Returns with all schedules for previous 2 tax years. If rented; copy of lease(s).

If you have filed bankruptcy in the last seven years:

Copy of petition and discharge, handwritten explanation of the reason for bankruptcy.

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What do these Closing Cost terms mean?

Your costs will include: the sales price, the balance of your down payment, loan costs, title costs and government recording fees, HOA fees, taxes and any certs. How you negotiated your contract of sale and your loan type will determine the allocation of specific charges between you. When you apply for your loan, your lender will give you an estimate of your closing costs which should include all of your costs. Keep in mind this is an estimate but you can use this to get your bank check or initiate your wire for closing. You cannot write a personal check at closing so a bank check made payable to you or Foote Title Group will be necessary. .

Buyer’s Closing Cost Terms: Lender's Fees (not all loans are the same so these fees may vary)

- Points – Each point is a percentage of the loan amount and is thecost for the interest rate you want.

- Doc Prep Fee - The cost to prepare the loan documents.

- Tax Service Fee – The cost for making sure your taxes and insurance arepaid to the correct place and at the correct time each year.

- Mortgage Insurance - Insurance that protects the lender if you fail tomake your payments and you borrowed more than 80% of the sales price.

- Escrows – the monthly amount the lender will collect and save to pay yourtaxes and insurance each year.

- Interest – the per day amount it costs to bore the loan from the date youclose until the date the first payment is due.

Buyer’s Closing Cost Terms: Closing Fees

Settlement Fee - This is our fee for preparing docs, examining the title, fixing any title problems, preparing to insure the title, the work at the closing table, coordinating everything and everyone, paying all of the bills, paying off the sellers loan, ensure the lender has a secure loan, make sure the sellers loan is released from your home and getting all of the documents completed and back to where they belong to make sure you own what you purchased.

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Title Abstract – This is the cost paid to a professional title searcher to research the public land records to verify the seller selling the home to you is the owner of that property also what loans they own on against the property.

Title Insurance Premium – Title Insurance is a policy that insures that no one can take away your home or if they can that you’ll be reimbursed for you costs. The premium is a percentage of the loan amount and the sales price. It’s a one time premium with no deductibles.

What are Governmental Recording Charges? County and State Transfer and Recordation Taxes – Every jurisdiction is different, the various local and state governments charge these taxes at the time of your purchase. These costs are calculated based on a percentage of the sales price or loan amount of the home you’re buying. We have all of these calculations on Maryland and Virginia on our website.

Buyer’s Closing Cost Terms: What other costs could I have?

Survey - The fee for a house location survey showing the approximate location of the improvements within the boundaries of the property. You may choose to order a boundary survey certifying the exact location of the boundaries and improvements.

Termite Inspection – The cost to have an inspector examine the home you’re buying to ensure that there are no active termites that would require treatment beforehand closing.

Well/Septic Inspections – These tests are done on these two services if the home is served by a private well or private sewer system to ensure they are in proper working order before closing.

Homeowner’s Association or Condominium Fees - If applicable, this fee will usually be the next month's fee; in addition, you will reimburse the Seller for the portion prepaid by the seller.

Property Taxes - You will reimburse the Seller at closing for any taxes they’ve already paid for the current year. All future tax bills are paid by your lender from your escrow account.

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The Settlement Process

Settlement Day should be a celebration, whether you are purchasing your first home or your tenth. While you’re packing, scheduling the movers and ordering your utilities, can be sure that we are working very hard to make sure all of the pieces come together as they should and your closing goes smoothly. Here’s a behind the scenes look at the process:

BEFORE SETTLEMENT

There are lots of pieces to the puzzle that need to be coordinated before you get to us:

• When the contract is received, we review it for accuracy. If we receive an earnest moneydeposit check we deposit that into an escrow account for safe keeping until closing.

• Then we request the title search. When it comes back we review everything in the titlesearch.o We are looking to make sure the seller really owns the property.o Verify who they owe.

Then its time to prepare an explanations of what we find for your lender. This is called a Title Commitment.

• Next we order payoff figures from whomever the seller needs to pay for what they’veborrowed against the property.

• We then order property inspections, surveys, termite reports and well and septic tests (ifnecessary). If any problems or discrepancies are discovered, we let your Real Estate agentknow so they can get the problem to be corrected.

• Then we double check previous work for accuracy and completeness before preparing thefinal figures and documents for closing.

• Your lender will supply us with their figures and loan documents to be signed (this usuallyhappens the day of or the afternoon before closing).

• Your funds for closing must be in the form of a cashier’s or certified check or wired funds.Your check can be made payable to Foote Title Group or yourself, which ever you prefer.

• Your Lender will require evidence of home insurance prior to closing. Check with the loanprocessor before settlement to see if you need to bring any documents to settlement.

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DURING SETTLEMENT

There are lot of documents you’ll have to review and sign at closing. Here we’ve got descriptions of several of them to keep you prepared in advance.

The Closing Disclosure The first document you will review and sign is the Closing Disclosure. This has all of the costs and credits to the Buyer and Seller. Buyers and Sellers will each have their own disclosures and we will review separately.

Note The Note is the loan document which you sign promising to repay the borrowed money to the Lender. This document will detail the terms of your loan and the form of repayment.

Deed of Trust This is the mortgage document that’s recorded at the courthouse in the land records of the county where the property is located. It ensures the Lender’s loan on your property is secure. This document protects the lender so if you do not make your loan payments they can sell your home to repay the loan.

First Payment Letter This shows you the amount of your monthly payment. Which includes principal, interest, monthly property taxes, monthly home owner’s insurance and possibly mortgage insurance.

Loan Approval Letter or Loan Commitment Letter This letter is from your Lender and explains that your loan has been approved and what the terms are. The letter will state the terms of the loan (like the loan amount, interest rate, length of the loan). They’ll also list any thing they need from you to complete your loan.

Loan Application You’ll be asked to sign a typed copy at closing. It’s a confirmation of the hand written one the loan officer filled out when you applied for your loan. Your Lender is now asking you to verify that there have been no changes in your employment or financial status.

Flood Insurance This will tell if your new home is in a flood zone. If the property’s in a flood zone, your Lender will require you to get flood insurance.

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Tax Authorization Some Lenders have you sign written instructions to the local county treasurer. To authorize them to send the tax bill directly to the Lender so they can pay the bill from your escrow.

Escrow Breakdown At settlement, you’ll get a breakdown of your escrow account set up and what it looks like after each monthly payment. This will also show when the bills for taxes, home insurance and/or mortgage insurance are paid.

Location Survey If your dream home is a single family detached home or a townhouse, your Lender could require a location survey. It’s is prepared by a licensed surveyor to show the structures within the boundaries of the property. If you want, you can request a boundary survey, which certifies the exact locations of your property lines. This type of survey is a lot more expensive. You may want to order this type of survey if you are concerned about boundary lines or want to build something.

Termite Inspection You may be asked to acknowledge receipt of a copy of the termite inspection report. This will tell if there is any infestation of wood-destroying insects and if they discovered any damage.

That’s it! It’s closing day, and it’s finally time to hand you the keys.

Welcome to your new home!

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Ways I could loose my home 1. Forged deeds, mortgages, satisfactions or releases2. A deed signed by someone that’s insane or mentally incompetent3. A deed signed by a minor4. A deed from corporation, that doesn’t have the corporate authority through by-laws or corporate resolution5. A deed from partnership, unauthorized under partnership agreement6. A deed from a trustee, unauthorized to sign under trust agreement7. A deed signed by "corporation" before” it was incorporated, or after it loss its corporate charter8. A deed from a legal nonentity (for example, a charity or club)9. Claims resulting from use of "alias" or fictitious name10. A deed challenged as being given under fraud or duress11. A deed following non-judicial foreclosure, where procedures were not followed12. A deed affecting land bankruptcy, receivership, probate, conservatorship, dissolution of marriage which has not

been authorized by the court13. A deed following judicial proceedings, where all necessary parties weren’t joined in14. A deed signed by mistake (owner/seller didn’t know what they were signing)15. A deed signed using a falsified power of attorney16. A deed signed using an expired power of attorney17. A deed signed by power of attorney and the person who gave the power of attorney is deceased disabled or insane18. A deed that seems valid, but actually delivered to the purchaser after the seller/owner dies without their consent19. A deed affecting property described to the buyer to be separate property of the seller which is fact owned jointly

with someone else20. A seller that signs a deed as a sole heir of a deceased former spouse when in fact there is a divorce21. A deed affecting property of deceased person, that all heirs are not joined in22. A deed following the distribution of the of missing person, who later reappears23. A deed signed by an heir or survivor of a joint estate, who murdered the deceased24. Conveyances and proceedings affecting the rights of service member protected by the

Soldiers and Sailors Civil Relief Act25. A bad release of mortgage because of incorrect information in the document26. A bad release of prior mortgage or lien that was fraudulently obtained by a previous owner27. A disputed release of prior mortgage or lien which was given by mistake or misunderstanding28. An incorrect subordination agreement, which causes the second mortgage to take over first place in

priority of repayment29. A deed recorded, but not properly indexed so it’s not able to be found in the land records30. A federal or state tax lien which was not disclosed in the title search but is recorded in the land records31. A judgment or spousal/child support lien which was not disclosed in the title search but is recorded in land records32. A prior unreleased mortgage which was not disclosed in the title search but is recorded in the land records33. A notice of pending lawsuit which affects the property which was not disclosed in the title search but is recorded

in the land records34. An environmental lien which was not disclosed in the title search but is recorded in the land records35. An option or right of first refusal to purchase this property which was not disclosed in the title search but is

recorded in the land records36. Covenants or restrictions which were not disclosed in the title search but which are recorded in the land records37. Easements which allow access the to property such as easements for access, utilities, drainage, airspace or views

which were not disclosed in the title search but are recorded in the land records


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38. Boundary agreements or party wall agreements or property setback agreements which are recorded in the land records but were not disclosed in the title search

39. Errors in tax record (mailing bill to wrong party resulting in a tax sale, or crediting payment to wrong property)40. Incorrect release of a tax lien or HOA assessment lien, which is later reinstated to the tax rolls and

against the property41. Incorrect tax information provided by the taxing officials (which are not binding by the way)42. Special assessments which become liens once they are passed but before recorded notice of the

assessment is made43. Now illegal covenants or restrictions in ancient documents44. Misinterpretation of wills, deeds and other instruments45. Discovery of will after assuming someone died without one and after the transfer has taken place46. Discovery of will with a later date after probate of first will47. Incorrect or incomplete legal descriptions48. A deed to land without a right of access to a public street or road49. A deed to land with legal access subject to undisclosed but recorded conditions or restrictions50. A right of access to your property which is wiped out by a foreclosure on the neighboring property51. Defects in a deed, such as missing notary signature or missing notary seal52. A deed which is missing a legal description53. A deed which is signed by a notary with an expired notary commission54. Forged notary signature on a deed55. Forged witness signature on a deed56. A deed which is not properly recorded for example it has the wrong county or is missing pages57. A deed from seller who has claimed to have gotten the title58. Through fraud of a prior owner


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CELEBRATING YEARS

PLANNING YOUR MOVEA CHECKLIST FOR THE ORGANIZED MOVER

FIRST DAY HANDY ITEMS

Pet FoodScissorsTea KettleCoffee PotUtility KnifePaper PlatesPaper TowelsCoffee, Tea, Soft Drinks

Install new locksEnsure utilities are hooked up/transferredBe on hand to answer questions, pay the movers andexamine your goods

Do-it-yourself moving? Pick up the truck earlyMake a list of boxes loaded onto the truckLet the movers know where to reach youCheck your old house to make sure you have turned offthe waterMake sure no appliances are left runningInspect the basement, attic and garageLock up all doors and windowsMake sure your on hand to answer questions and givedirections to the movers

Defrost your refrigerator and freezerGet last minute packing doneArrange to have cash, a certified check ready to make anypayments need for movingSet aside valuables and legal documents to go with you, not inthe moving vanPack your first-day handy items to go with youSet up phone, cable and utilities for new home

Get estimates from moving companies or truck rental companiesUse up things that can’t be moved like food

Meet with movers to discuss costs, insurance, packing, loading,and deliveryInventory your possessionsGet copies of records from doctors, dentists, lawyersand accountantsMake arrangements to transfer kids school recordsFill out a change of address formsChange address on magazine subscriptionsSpeak to your accountant about tax deductible moving expenses

Get boxes and newspapers for packingIf necessary, arrange for storage

Start packing things you don’t useArrange to transfer utilities and services from your old home toyour new homeMake travel and hotel reservationsGet car license, registration and insurance in order

Arrange to transfer all of your bank accounts to your new branchlocationsCancel any direct deposit on bank accounts you’re closingCancel delivery services

Transfer all prescriptions to a pharmacy in your new locationDon’t forget about your pets - get all necessary prescriptionsand veterinary records forwarded to a new office

SoapShelf LinerTrash BagsToilet PaperToiletries KitMasking TapePencils & PaperBath Towels/Bed Linens

8 WEEKS OUT 2-3 DAYS OUT

MOVING DAY

MOVE IN DAY

6 WEEKS OUT

4 WEEKS OUT

3 WEEKS OUT

2 WEEKS OUT

1 WEEK OUT


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Some terms I might see and what they mean APPRAISAL This is a written value of what the property you’re buying is worth based on the opinion of a licensed professional appraiser. Appraisals, generally, do not determine the condition of the property, you should satisfy yourself as to the condition whether personally or with the help of a licensed home inspector.

ARM This acronym stands for Adjustable Rate Mortgage. An adjustable rate mortgage has a starting interest rate which will adjust from time to time in based on an agreed upon formula. Upon each adjustment, your new payment will be calculated by applying the new interest rate to the balance of the mortgage over the remaining life of the loan.

ASSUMABLE MORTGAGE Some mortgages used to have a feature in them that the allowed the owner of a home with this type of mortgage to sell their home and the purchaser could take over or “assume” the balance of the mortgage and take over the current payments. Most fixed rate mortgages are not assumable.

BUY-DOWN This type of loan has a feature that allows the buyer to put a specified amount of money, at the time of settlement, in savings with the lender to reduce the monthly payments. This amount is used to apply to the monthly payments to “buy down” the interest rate and reduce monthly payments for a specified period of time usually over 3 years. Doing this also allows you to qualify to borrow a little more than you otherwise would.

COLLATERAL The collateral is the property you promise to the lender to secure the repayment of the loan until the loan is paid off and released.

DEED This is a legal document which is used to transfer the ownership of real estate from one owner to another. Once a Deed prepared signed and recorded in the land records, the ownership to the property is said to be “vested” in the new owner(s). The Deed is prepared by the settlement/title company. It has the names of the current owners as “Grantors” and purchasers as “Grantees” and will describe the property that’s being transferred. It also has a clause called an “and being” clause that has the recording information from the previous deed. This where the current owners deed when they purchased the property is recorded. Thus how ownership is tracked back through the records of the previous owners.

DEED OF TRUST (MORTGAGE) The legal document that is signed by the borrowers of the loan to secure the loan against the collateral property. The Deed of Trust or Mortgage is prepared by the Lender and delivered to the settlement agent all of the other the closing paperwork. One important condition of the Deed of Trust/Mortgage is that it gives the beneficiary of the loan the legal right to foreclose on the property that’s listed as collateral if the borrower stops making the payments or violates any of the other rules they agreed to.


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DEFAULT Default happens when a borrower fails to follow through with any of the conditions of the loan that the agreed to in writing in the Deed of Trust/Mortgage. A borrower’s default may allow the lender to demand full repayment of the loan immediately or result in foreclosure of the Deed of Trust.

DISCOUNT FEE A fee paid to the lender, at settlement, to secure a preferred rate of interest on a loan. This fee is generally referred to in terms of a percentage of the loan amount or “points”. Generally, the more discount points paid, the lower the interest rate.

DUE ON SALE CLAUSE This is a pretty standard rule today. It is a rule contained in the Deed of Trust/Mortgage which states that if the borrower sells the property that is secured by the loan then the loan must be paid in full. The Lender does have the option to waive this requirement but must provide written consent.

EQUITY This is the difference between what you owe on your home and what it is worth. That difference is considered your “equity” in your home

FORECLOSURE If you violate one of the rules of the Deed of Trust/Mortgage, including not making a payment, the lender can auction off real estate securing its loan. The proceeds of the sale of the property are applied to the balance due on the loan. If there is an additional amount due on the loan after the foreclosure the lender may record a judgement against you for the balance.

HOME INSPECTION REPORT A written report of the physical condition of the property that you’ve made an offer to purchase. This report is prepared by a licensed professional home inspector. Typically this inspection is ordered by the purchaser to be conducted within a special time period following contract being completed signed by all of the parties. The buyer or their Realtor may meet the home inspector at the home so as he/she inspects all of the parts of the home they can explain what they find. After the inspection is complete and depending on the findings the buyer may need to make and addendum to the contract to request the seller repair some items. This will depend on the terms of the contract that was originally agreed to. The home inspection is no guarantee as to any future condition of the property but only the details of the findings on the day of the inspection.

HOUSE LOCATION DRAWING A drawing which is prepared by a licensed surveyor that details any structures and improvements on a property. It will also detail the platted property boundary lines, building restriction lines and any easements or rights of way. The drawing will also include a certification with regards to the property being within or outside of a special flood hazard zone.

MORTGAGE INSURANCE PREMIUM (M.I.P.) This is the insurance premium the borrower will have to pay for insurance to protect the lender in case the loan payments aren’t made and they lender must foreclose to recapture their loan. If they have to foreclose and the money collected from the sale of the real estate is not enough to cover the outstanding balance and costs due to payoff the loan the mortgage insurance policy will cover the difference. Mortgage insurance is usually required for conventional loans where the borrower borrows more than 80% of the appraised value of the property. Mortgage insurance is always required on FHA loans there is no percentage of the loan to appraised value ratio.


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NOTE The Note is a legal document that contains the promise the borrower agrees to to repay the loan borrowed from the lender. The Note is typically prepared by the lender and is signed by the borrower at closing. A Note will include the original principal amount of the loan, the initial rate of interest, the maturity date. It will also describe any potential changes to the interest rate or due date depending on the type of loan. The Note will also describe the conditions of repayment and the penalties for failure to repay the loan.

ORIGINATION FEE This is a fee charged by the lender to initiate the loan process and their cost to do the loan. This fee is typically referred to in terms of a percentage of the loan amount or “points”.

POINTS Common term used in the industry when referring to loan origination fees and discount fees. Each “point” represents one percent (1%) of the loan amount. The purpose of points is the “buy down” the interest rate. The more points you pay up front at closing the lower you can get your interest rate.

CLOSING DISCLOSURE The final accounting of all lender’s fees, settlement costs, inspections required for closing and adjustments paid by or exchanged between the Buyer and Seller. The Closing Disclosure is prepared by the lender with information from the Settlement/Title Company. It is a standardized form that has all of your costs and all of the new loan details and the property details. Once it is completed by the lender it is sent to the Title/Settlement Company for review and confirmation of the fees the coordinate. When all of the paperwork is complete the lender will send the Closing Disclosure and the paperwork they need to be signed to the Settlement/Title Company for signing at closing.

SHORT SALE When the proceeds from the sale of a property are less than the amount the sellers owes to pay the loan off on the property. The mortgage lender agrees to accept a lower amount to satisfy the loan. Typically, the lender will decide if the loan is completely satisfied based on the financial situation of the seller, as well as the real estate market conditions at the time of the sale.

TENANCY The legal term used to describe the different types of ownership that can be chosen when there is more than one person purchasing a piece of property. This choice of tenancy must be specifically stated in the Deed.

Joint Tenancy (with right of survivorship) is a form of co-ownership that allows at the death of any of the owners, joint tenants, the title to the property will automatically be transferred to the surviving owners. There is no need to do a deed to transfer this ownership it is automatic (NOTE: each joint tenant must take title to an equal share of the property). Tenancy by the Entirety is a form of co-ownership between a husband and wife. Upon the death of either spouse, title to the property will automatically be transferred to the surviving spouse. Tenancy in Common is a form of ownership where, upon the death of any of the owners that owners share does not automatically transfer to the surviving tenant(s) in common, but rather is distributed as part of their estate to their heirs.


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TITLE INSURANCE Insurance which protects the purchaser and the lender against loss or damage resulting from defects of title or the enforcement of liens against real estate existing at the time of issuance. Potential defects covered will include matters that may not be discovered from a search of the public records, such as past frauds or forgeries. Title insurance requires a one-time premium paid at settlement which protects you for as long as you own the property.


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Provided Courtesy Of...

!

In Maryland: 3200 Crain Highway • Suite 200

Waldorf, Maryland 20603 (301) 870-8525

www.footetitlegroup.com

In Virginia: 6131 James Madison Parkway,

Hillcrest Office Park King George, Virginia 22485

540-644-9990www.footetitlegroup.com


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Guide to Home Buying · prepared this guide for you. Your choice of a real estate agent, loan officer and title company is as important as your choice of which home to buy. Finding

Documents