Dear Michael: Our home is in escrow and the buyers have asked us to pay for a home warranty. Is this customary?
Answer: Home warranties offer you protection for one year against potentially costly problems, such as unexpected repairs on appliances or home systems, which are not covered by homeowner’s insurance. Warranties are becoming most popular because they offer protection during the time immediately following the purchase of a home, a time when many buyers find themselves cash-strapped. It is a good idea to buy a home warranty for your buyer’s, the cost for coverage on a 3 bedroom house should not exceed $500. Please note that there is a fee for every service call, usually around $60 per visit.
Dear Michael: We are buying our first home and would like to know how much we will need for our down payment?
Answer: The larger the down payment, the less you have to borrow, and the more equity you’ll have. Mortgages with less than a 20 percent down payment will require property mortgage insurance (PMI) policy to secure the loan. PMI can run in the hundreds of dollars depending on the loan amount. When considering the size of your down payment, consider that you’ll also need money for closing costs, moving expenses, and – possibly -repairs and decorating. If you can put 20 percent down you will have a better rate and no PMI and therefore be saving on your monthly mortgage payments.
Dear Michael: What happens on the day of closing and can I move in on that day?
Answer: The actual day of your closing will be within 5 days after which you as the buyer deposit any remaining money from your down payment due into escrow and sign your escrow and loan documents. Loan documents will be returned to your lender for final review. Closing is the day in which the deed is exchanged for the sales proceeds. “Recording” will also take place on that day, which means that the deed and any mortgage documents are recorded at the county court house and transferred to you as the new owner as official record. These documents are made as “public record” for anyone to view them. The actual day that you can move in will be determined by the terms of your purchase agreement. It may be the day of closing, or it may be a day or two after the closing.
Michael Kayem is a Realtor with Re/max /Execs serving Culver City and the Westside since 2001. You can contact Michael with your questions at 310-390-3337 or e-mail them to him at: homes@agentmichael.com
