Dear Michael: We are buying a home with 100 percent cash (no loans). What is the advantage for us and seller by not getting a loan?
Answer: If you buy a home with cash you are in the minority and are in a much better position for bargaining. There are many benefits of buying a home with cash. You should consider both before deciding how and if you should finance your home purchase. Here are a few of the advantages in buying a home all cash. Bargaining Power: Most prospective buyers will have to finance their purchase with a mortgage. That means there is always a chance that their financing will fall through. Sellers want to eliminate risk. Faster Closing: If you pay for a house with cash, you can usually close within two weeks as opposed to at least 30 days with a mortgage. No Appraisal: When you pay cash for a house, you and the seller agree on the price and it’s a done deal! If you have to obtain financing, the bank will require an appraisal and will cap the mortgage at the appraised price. No Interest: Interest can double or triple the amount you pay for your house over 30 years. If you pay cash for your house, you pay the purchase price and no more. No Mortgage Payment: When you pay cash for a house, you free yourself from a mortgage note payment. This allows you to find other uses for your income each month. And retire with less debt.
Dear Michael: We are in escrow on our home. What steps will need to be executed to sign over the title to my house to the new buyer?
Answer: First, a property search will need to be performed by the title company. The title company will return the results of the title search in the form of a preliminary title report. This information will help ensure there is clear title; the report will be needed to prepare the grant deed. The escrow company or a real estate attorney will prepare a grant deed specific to the parties and property involved in the transfer. Once the deed is prepared, the grantor (seller) will need to sign the grant deed which must be witnessed by a notary public. Once this step is complete, the deed must be filed at the county recorder’s office. The escrow and title companies will be in charge of making sure that all matters are attended too. A recording fee will apply.
Dear Michael: we are in escrow and waiting for our loan to be approved. How long does it take for a bank to approve a mortgage loan on a purchase of a property?
Answer: Usual underwriting turn-around time is about 17-21 days from start to finish. With low rates and today’s banks managing high volume (including refinances) has caused a slow down. Purchase transactions are being prioritized over refinances. Purchases typically take longer from application to the time the loan funds. Self employed borrowers, and FHA loans can take a longer period because of the increased documentation these loans require. The most effective way to have an approval is to turn in a complete file for the underwriter to approve the first time the loan application is submitted. If you need a quick close, choose your loan officer or mortgage broker wisely!
Michael Kayem is a Realtor with Re/max estate Properties 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.