Ever wonder what your total cash to close would be to buy your home? Or how much money you will pocket from the sale of your home? Now there's an app for that.

"Close It! is like Turbo Tax for real estate transactions," said Todd Ewing, president of Federal Title who first conceived of the app last summer. "And the results are accurate within one-tenth of 1 percent on average."

Download the app now >>

Close It! is the first mobile app that produces a complete, picture of cash to close and monthly mortgage payments for homebuyers and cash in pocket for home sellers. It's free to download for iPad.

Title professionals across the country have used technology like this in-house for years now, but Close It! is the first app that makes it easy for homebuyers and sellers to produce a HUD-1 Settlement Statement – such as what would be reviewed and signed at the closing table – right from their mobile device.

Getting started with the app is as easy as entering a purchase or sales price. Then fine tune the results on a live, dynamic worksheet and instantly narrow down cash to close or cash in pocket with great accuracy.

Whether you're shopping for homes or getting ready to sell, calculate your costs right on the spot with Close It!

To homebuyers in Florida: beware of misleading annual property tax assessments when researching homes online.

An amendment to the state constitution known as Save Our Homes, around since 1995, caps annual increases to assessed property value at 3% or the change in the Consumer Price Index – whichever is lower.

When the property changes ownership, the SOH property assessment value expires at the end of that calendar year. The new owner must apply for her own Homestead Exemption, and the property will receive the SOH benefit beginning the second year. I'm paraphrasing this article.

Homebuyers who are unaware of the program may view the annual property tax assessment listed on a real estate website or government database and mistakenly think their property tax assessment will be roughly the same. But in many cases the new assessment will be significantly higher than the old one, resulting in a large jump in annual property taxes that are due.

SOH is only good for homes that are receiving the Homestead Exemption. Rental and investment properties do not qualify. In the majority of cases SOH may not be inherited. If the house is a duplex and 50% is owner-occupied principal residence, only 50% of the property assessment is shielded by SOH.

Florida homeowners enjoy a Homestead Exemption of $50,000 for if their Florida property is their permanent residence, but they must apply for it. That amount is deducted from their property's assessed value and the taxes are based on that lower number. There are a number of other exemptions available ranging from persons with disabilities to veterans to widows and surviving spouses of service members.

Two major changes to FHA loans designed to boost its depleted mortgage insurance fund may result in many borrowers opting to forego an FHA loan for a conventional loan with private mortgage insurance.

The first change became effective April 1, 2013 in which the annual mortgage insurance premium charged to borrowers has increased 5-10 basis points, depending on the loan amount and loan term.

For example, for a 30-year $500,000 loan with a loan-to-value ratio greater than 95%, the new FHA mortgage insurance premium will be 1.35% or $6,750 per year (previously 1.25% or $6,250 per year), for an overall increase of $500 per year or $42 per month.

Click beyond the chart to review updated charts and rates

The Federal Housing Finance Agency (FHFA) announced earlier this month that Fannie Mae and Freddie Mac would extend the Home Affordable Refinance Program (HARP) through December 31, 2015 .

The HARP Program was originally set to expire December 31, 2013.

The extension will allow more borrowers who have little or no equity in their homes take advantage of refinancing at today’s lower interest rates.

Eligibility for a HARP refinance is based upon the following criteria

1. The borrower’s current loan must be owned or guaranteed by Fannie Mae* or Freddie Mac**
2. The current mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
3. The current mortgage must not have been refinanced under HARP previously unless it is Fannie Mae loan that was refinanced under HARP from March-May 2009
4. The current mortgage’s loan-to-value (LTV) ratio must be greater than 80%
5. The borrower must be current on their mortgage payments, have no late payments in the prior 6 months, and must not have more than 1 late payment in the prior 12 months

In addition to announcing the extension of the HARP program, the FHFA further announced the launch of a nationwide campaign designed to inform borrowers about the HARP program and its eligibility requirements in the hope that it motivates more borrowers to refinance using the program.

The HARP Program has already assisted approximately 2.2 million borrowers refinance since April 2009.

With interest rates remaining steady at all-time lows and a housing market that has seen below-market prices in most areas, now is a great time for servicemembers to purchase a home or refinance their existing home and take advantage of the benefits of a VA loan.

So, what are the benefits of a VA loan?

1. It is available for active-duty servicemembers, veterans and some surviving spouses
2. It can be used to purchase an existing home, build a new home or refinance an existing mortgage
3. For the purchase of a new home, a down payment is not required – it is possible to finance 100% of the purchase price
4. For the refinance of an existing VA mortgage, borrowers can refinance to a lower interest rate VA loan (VA to VA loan) without having to re-qualify by taking advantage of the VA Streamline Refinance Loan Program (IRRRL)
5. If the borrower/purchaser can provide proof from the VA of a service-related disability, the VA funding fee may be waived by the lender
6. There is no form of mortgage insurance premiums that are paid during the course of the loan, unlike FHA loans or some conventional mortgages
7. While conventional mortgages guarantee the best interest rates for borrowers with a credit score of 720 or higher, a VA loan will not be denied to a borrower nor will a higher interest rate be charged based solely on a low credit score

Now is the time to take advantage of this government-backed loan program and low interests rates to buy the home of your dreams!

As a real property owner in the District of Columbia, the last thing you would ever want or need is for the Department of Consumer and Regulatory Affairs to classify your property as Class 3 – Vacant Real Property.

That's because the DC Office of Tax & Revenue assesses properties classified as vacant nearly six times the rate of a residential real property. So instead of paying $0.85 per $100 of assessed value, Class 3 property owners pay $5 per $100. (Still not as bad as a Class 4 or "blighted property" classification, which is assessed at $10 per $100.)

While the policy overall has helped the city clean up rundown houses and revitalize neighborhoods, occasionally it can lead to headaches for property owners such as someone who bought a fixer-upper that hasn't been occupied for some time.

Our office deals with these types of situations from time to time. Here are some examples of questions people call in with. If you have other questions, feel free to contact us. 

Click beyond the jump to continue reading the Q&A

While all government jurisdictions collect taxes on real property, each does so in its unique way. Collection methods and tax due dates, for example, vary from one jurisdiction to the next.  

To help you navigate real property taxes in the District of Columbia, Maryland, Virginia and counties in Florida where we operate,  we have compiled this list of tax collection & billing offices along with links to property tax assessment pages wherever possible. This information will help you better understand how property taxes work and predict your property tax liability for any given property in that jurisdiction.

Click beyond the jump to continue reading.

Fannie Mae and Freddie Mac will offer a new loan modification initiative designed to help troubled borrowers avoid foreclosure and remain in their homes, according to an announcement today from the Federal Housing Finance Agency.

Consequently loan servicers will be required to send a Streamlined Modification Solicitation Offer to troubled borrowers who are delinquent on their mortgages for at least 90 days beginning July 1, 2013.

The purpose of the initiative is to simplify the way a borrower’s current mortgage payments are reduced and modify their current loan without requiring the borrower to document their income and financial hardship. The offers will include a reduction in mortgage payment based on a fixed interest rate, potential extension of the loan term to 40 years, or a principal forbearance for qualified underwater borrowers.

Click beyond the jump to continue reading

In about half of the settlements that I conduct a seller will stop me and comment, “The payoff is too high, I owe less than what’s listed.” This is because the seller is confusing the mortgage principal balance with the payoff amount.

The principal balance is the remaining principal due on the loan. This gets reported in monthly statements from the lender and is available if you call your lender or check online. With a fully amortizing loan, part of your monthly payment is going to paying down the principal every month. 

However, a payoff is the amount owed on the loan to pay it off on a specific day. Note that interest on a conventional mortgage accumulates daily*. Also keep in mind that a mortgage is paid in arrears – the monthly payment is for the prior month’s interest. 

So when you make the April 1 payment, you are paying the interest due on the loan from March 1 to March 31. Consequently, if you are closing on April 10 and have already made your April 1 payment, you still owe interest from April 1 to the date of payoff. 

Typically a cushion is selected so that there are sufficient funds to pay off the loan, so the amount submitted to the lender in the above scenario is likely: principal balance + per diem interest due from April 1 to April 13 equals the mortgage payoff. 

The reason for the cushion is not to cheat you out of some money, though I’m sure it feels that way. It is to make sure there is not a shortage when paying off the loan. In our scenario, assuming that everything was completed in a timely manner, the seller will receive back from the payoff lender two to three days of interest that were overpaid. 

So how do you determine your payoff amount?  

The title company is going to order a payoff letter from your mortgage lender to find out the precise payoff amount. 

What if you're trying to prepare an estimate and would like a figure?  

You can always call your lender and obtain a payoff from them over the phone. Some lenders will calculate a payoff amount for you online as well. Just remember to add a few days to the closing date so that you have allowed for a cushion. 

But for most estimates, using this trick will suffice: take your principal balance and add to it a monthly payment. Assuming that you are on time with your payments, this number should always be a bit higher than your actual payoff, but at least this way you will be overestimating instead of underestimating, which is typically the case when you use the principal balance as the payoff amount.

---

* Interest on an FHA mortgage accumulates monthly. Therefore, interest is always owed through the end of the month. However, to calculate an estimated payoff, the same concept applies: take the principal balance and add a monthly mortgage payment to obtain an estimated payoff. 

I want a home inspection, but I don’t want to put a contingency in my offer. How can I have it both ways?

Since inventory is low in the DC area, most potential buyers do not want to remit an offer that has any contingencies. Many buyers find themselves in a multiple contract deal and their agents let them know (and rightly so) that any contingencies in their offer may make the offer less desirable when competing for a property. 

So, how does a buyer get a home inspection and still make a solid offer?  

Some of the agents in the area are requesting a pre-inspection with a termite inspection for purchaser’s purposes only. The inspections are only so the purchasers get an idea of what they may be signing up for if they put in an offer for the house “as-is” as of the date of the pre-inspection without an inspection contingency. 

This type of contract tends to be a stronger contract for the sellers too, because the purchasers already have an understanding of the condition of the house and are not solely relying on disclosures. 

The down side to handling everything this way is there is an expense to getting the property inspected without knowing if the seller will accept your offer. 

Depending on the property, there is another approach agents are taking. They do a thorough walk through of the property with their clients at the open houses; and, if all looks good, the purchasers buy a home warranty at settlement to cover anything they may have missed. 

Purchasers should make sure they have a clear understanding when they are buying a house “as-is” without an inspection – they may be taking on conditions they did not anticipate. They should also make sure to read the seller disclosures thoroughly and know what a home warranty may or may not cover.

Q. What is a location survey?

A. A location survey is a sketch or drawing that shows the boundaries of a particular property. Also, the survey typically includes the dimensions of the house, patio or any additions as well as the locations of fences and any easements or rights of way. Mortgage lenders generally require a survey before lending on a purchase transaction. However, if you are paying cash and not obtaining a loan, you can choose whether or not to obtain a survey. 

Q. Why should I want to obtain a location survey?

A. A location survey defines exactly what it is that you are buying. Just because the back yard has a fence, doesn’t mean that you own everything inside the fence (or that you might not own something outside it). Over the years we have seen many buyers surprised to find out that: 

• they did not own the driveway, 
• their house was over the property line, 
• the neighbor’s fence was inside their yard, 
• their fence was outside the property lines, 
• half of what they thought was their back yard belonged to a neighbor,  
• and countless other complicated scenarios.

Q. Doesn’t the legal description on the deed list the property being conveyed?

A. Yes, but legal descriptions are sometimes wrong. We have seen legal descriptions that have included public alleys and incorrect property dimensions. The survey helps as a check to make sure that the correct legal description is listed. When it is incorrect, a new description is prepared, with the help of the surveyor. 

Q. When do I get to look at a survey?

A. Federal Title & Escrow Company sends out the location survey to the buyers and the buyer’s agent as soon as it becomes available. This way you will have a chance to review it and you can address any issues and/or concerns prior to settlement. The closing attorney will also review the location survey with you again at the closing. 

Now you’re doing a refinance, and your appraisal is scheduled for next week. We talked earlier about what you can expect from an appraisal. Now let’s discuss some things you can do to prepare.

The following are some thoughts, based on my own personal experiences with refinance appraisals, including a refinance appraisal of my DC condo that took place this month.  I’m not an appraiser, so this is not a professional opinion.    

You will probably have at least a few days notice of the appraisal.  You can’t do every last project on your to-do list in those days before the appraisal.  You probably don’t have time to clean every surface of your home.  So how do you decide what to do?  Pick the things that matter and the things that will have the most impact.

If you have time, you should clean your home.  No, you’re not getting graded on your housekeeping, but it is only natural that the appraiser’s opinion on how well your home has been maintained will be influenced by how clean it is.  The key places to clean are the kitchen (whole room), bathroom (whole room), floors, walls, and baseboards, because they reflect on the condition of your home.  The layer of dust on your coffee table?  Probably not as important.  Also, remember that the appraiser will be taking photographs, so make sure to clean up anything that you might be embarrassed about if it were photographed and included in the report, like a messy, unmade bed or a laundry rack full of drying clothes.  

Be prepared, because the appraiser is probably going to open your closets.  When I was getting ready for my recent appraisal, I had forgotten this, and I did what I normally do when I have to clean up clutter quickly – I stuffed things in closets.  Appraisers are looking in your closets not to evaluate storage space but because they can sometimes count the closet towards square footage.  It doesn’t really matter if the closet is crammed with junk, as long as the appraiser can fit their tape measure in there to measure, but you don’t want an embarrassing avalanche to happen when they open the door.  

Depending on how much notice you have of the appraiser’s visit, you might have time to complete some unfinished projects.  If you do have time, you should again focus on the things that can impact the appraiser’s evaluation of the condition of your home.  Using another coffee table example, if you have “fix wobbly coffee table leg” and “patch hole in wall” on your to-do list, and you only have time to do one of the two, you should patch the hole in the wall, or at least cover it up with something.  And remember that the appraiser isn’t a home inspector, so he probably isn’t going to be checking to see if something is working properly, unless there is something that he sees or that you say that calls his attention to the problem.  

This leads to a general comment.  Unless it’s in response to a question, there is no need for you to highlight the negatives about your property.  So, for example, if the appraiser looks at your shiny, new washer and dryer and asks you when it was installed, you should say, “In December 2012” and not finish the sentence with “but it doesn’t work because as soon as we bought it the hose ruptured and flooded the whole basement, and we still haven’t had it fixed.” 

Another important way that you can prepare for the appraisal is to walk through your home and make a list of all of the major improvements you have completed since you purchased the property, if you don’t already have a list put together.  Include on the list the date and the cost of the improvement.  The list should include things like bathroom and kitchen upgrades, building system improvements (e.g., new water heater, new furnace), energy-efficient changes, new light fixtures, crown molding, built-in shelving, a new deck, exterior painting, new roof, etc.  The appraiser might not be able to consider some things that you put on your list, but there is nothing wrong with being over-inclusive and letting him decide.  In some situations, it may be appropriate for you to give the appraiser a copy of the list you prepared.  Ask the appraiser if that’s something he would like to review.  

You’re refinancing the mortgage on your home, and your lender tells you there will be an appraisal. 

If this is your first refinance, you probably have only a vague memory of the last appraisal of your home, which would have been before you purchased the property.  Most likely, your real estate agent took care of scheduling it and meeting the appraiser at the property, and you weren’t involved in the process at all.  All you cared about was whether the property appraised at the number you needed it to in order for your financing to work out.  You probably did a quick review of the appraisal report if/when you received it and then filed it away with your closing documents.

Now you’re doing a refinance, and your appraisal is scheduled for next week.  What can you expect from the appraisal? 

The following are some thoughts, based on my own personal experiences with refinance appraisals, including a refinance appraisal of my DC condo that took place this month.  I’m not an appraiser, so this is not a professional opinion.    

Click beyond the jump to continue reading.

Although there have been recent concerns about a shortage of homes for sale, South Florida currently ranks among the top 20 markets nationwide in which to buy foreclosures in 2013.

Miami-Dade, Broward and Palm Beach counties rank at No. 12 on the list recently compiled by Realty Trac Inc. Realty Trac’s report analyzed foreclosure inventory in the pipeline, average discounts and other factors for more than 200 metropolitan areas with populations of at least 500,000.

South Florida’s recent ranking is a somewhat of a surprise, given that local real estate agents and buyers have complained about a lack of properties for sale. Inventories of all available properties have fallen by approximately 50 percent in the past year, with many underwater homeowners still unable to sell and others waiting on the sidelines for prices to continue to improve. 

In addition, lenders have generally held off listing foreclosed properties, in part to avoid depressing prices. The limited quantity of homes for sale has led to bidding wars and offers well above asking prices. 

However, as South Florida has one of the nation’s highest foreclosure rates with 1 in 27 homes being in distress, the available inventory of bank-owned homes should likely increase providing further opportunities for investors and end users to acquire South Florida properties at historically low prices. 

Homeowners can do a number of things to ensure they get the best home insurance rate possible, and today I'd like to share some of my top suggestions, created with the help of manifested data and proven reports.  

While most companies' premiums for home insurance policies proposing the same coverage and policy forms are usually within $50 to $100 of each other. I should mention, too, that homeowners with repossessions, collection items, judgments, late payments and bankruptcies in the last five years of their credit history, will pay more for insurance – and may even be denied. 

That being said, here are 3 ways to lower the cost of your home insurance:

Increase your deductible

Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay a claim, according to the terms of your policy. The higher your deductible, the more money you can save on your premiums. Nowadays, most insurance companies recommend a deductible of at least $500. 

If you can afford to raise your deductible to $1,000, you may save as much as 25 percent. Remember, if you live in a disaster-prone area, your insurance policy may have a separate deductible for certain kinds of damage. If you live near the coast in the East, you may have a separate windstorm deductible; if you live in a state vulnerable to hail storms, you may have a separate deductible for hail; and if you live in an earthquake-prone area, your earthquake policy has a deductible. 

Combine home and auto policies under same insurer

Some companies that sell homeowners, auto and liability coverage will take 5% to 15% off your premium if you buy two or more policies from them. But make certain this combined price is lower than buying the separate policies from different companies.

Improve your home security

You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren't cheap and not every system qualifies for a discount. Before you buy such a system, find out what kind your insurer recommends, how much the device would cost and how much you'd save on premiums.

Louis Settle is an insurance agent with Liberty Mutual