Happy Thanksgiving

Happy Thanksgiving to you and yours from our family at the Hamad Law Firm, LLC.

Mortgage Rates Continue to Rise

It had to end sometime.  This year’s historically low mortgage interest rates, at least for the time being, have come to an end.  Rates have continued to rise for the 3rd week in the row, now passing 4% (for a conventional 30-year fixed-rate loan) in Connecticut and 3.74% nationally.

What does this mean?  Interest rates below 4% have become very hard to find, but if you asked anyone five years ago about 4% rates, they’d have laughed at you – it wasn’t even imagined!  So rates are still very good, they’re just not at historic lows.  If your rates are higher you should still consider refinancing.  Even a small reduction in your rate can add up to significant amounts over time.

If you are looking to refinance, get your paperwork ready.  You don’t have to submit it immediately – you might want to see what happens to rates over the next couple weeks – but you’ll want to be able to jump on a rate when you’re ready to move.  Remember, you’ll need tax returns, bank statements, information on previous addresses and recent credit inquiries, changes in marital status such as divorces, and more.  It’s a lot of paperwork.  You should be prepared to provide details about everything that has any affect on your money residency.

As mortgage rates rise, mortgage volumes have fallen off.  Both purchase and refinance activity has declined, with refinance activity declining significantly to 74% of total national market volume (as of May 23, 2013).

For More Information:

How to choose a Realtor®

Every day we hear horror stories about Realtor’s:  Client’s Realtor’s aren’t responding to them; they’re not showing the house; they’re not finding houses worth seeing; they aren’t working very hard; they’re driving up purchase prices to make more commission; they’re not setting up property viewings as requested.

Not all complaints are valid in all situations, but enough are that finding the right agent is a proper concern.  You need to find somebody that knows your area and that works the way you work.  Do you like e-mail?  Make sure the Realtor regularly uses e-mail.  Do you want constant updates on what is going on?  Make sure they are someone that is going to keep you informed.  There’s a hundred variables and a hundred risks when you sign on with anyone, including a Realtor.  It’s a very personal service and you need to be sure that you will enjoy the experience and profit from it.

So what does that tell us?  How do you find the Realtor that is right for you?  There is no easy answer to the question.  At the Hamad Law Firm, LLC, we can often point you in the direction of Realtor’s that we have used before and that we know will work well with you, but that’s only one answer.  Personal referrals not just from us but from anyone you know are very important.  Looking at someone online can only tell you so much – find out what your friends, your relatives, your business associates know about Realtor’s in your area.  If you don’t get good leads from that, go to the internet, see what you can find, and most importantly talk to the Realtor before you commit to dealing with them.

If you’d like a recommendation, be sure to contact the Hamad Law Firm, LLC, today.

We’ve Moved!

We’re proud to announce that we’ve moved our offices to 131 Dwight Street, New Haven, CT!

What is Title Insurance & Why Do I Need It

Lenders today require title insurance to protect their interest in property that they lend on.  If you have a mortgage loan or are taking a mortgage loan, it’s a sure bet that you will be required to purchase title insurance.

What is Title Insurance?

Title insurance protects the insured party against losses related to the title of the property.  Well what does that mean?  Property in the United States has its title recorded in the land records of the local area.  In Connecticut, these land records are managed by the town clerk of each individual town, and are stored at the town hall.  Unlike a car, you never physically hold the title to your property.  Rather, as each lien (such as a mortgage) becomes active, a mortgage deed is recorded showing it.  When each lien is released, a release of lien is recorded.  Over time, each properties record’s become more and more complicated.  This can be a source of error when a title search is done on the property, and may result in damage to your (and your mortgagor’s) claim to the property.  Title insurance can also protect against fraud in transfers – for instance, perhaps the last person to sell the house forged a signature on the deed.  Real estate taxes and other liens can also be title insurance issues, among a great deal of other items.

When do I purchase title insurance?

Title insurance can be purchased at any time, but is most commonly purchased immediately upon the purchase of a property or the closing of a loan.  When you close a loan you will see the cost of the title insurance listed on the settlement statement.  The loan-taker typically pays the entire premium, even though the title insurance protects either only the lenders interest, or both the lender and the purchaser’s interest.

Why do I need a new insurance policy when I refinance?

When you purchase a property you typically take out two title insurance policies – a “Loan Policy” that protects the interest of the lender, and an “Owner’s Policy” that protects your own interest in the property.  These policies last until the protected party no longer has an interest in the property.  In the case of the Owner’s Policy, it will not need to be repurchased no matter how many times you refinance.  Unfortunately, when you refinance, the lender for your previous loan no longer has an interest in the property, and therefore the previously purchased Loan Policy no longer exists.  Even in the case of a same-lender refinance, when one loan is paid off and a new loan taken, a new policy must be purchased.  Discounted title insurance rates ARE available in Connecticut when you are replacing one loan policy with another.

Where do I buy title insurance?

In Connecticut you must be an attorney to be a title agent and thus to sell title insurance.  Typically, when you choose the attorney that will close your loan, they will write the title insurance policy and bill you for it.  Title insurance is almost never shopped for by Connecticut purchasers individually, but rather by their attorneys.  It should be noted that in other states, such as New York, the title insurance agent and the closing attorney/agent are not always the same, and in many cases, cannot be the same.

In summary, title insurance protects interests in property from errors and fraud related to title.  The Hamad Law Firm, LLC, of New Haven, Connecticut, is a title agent and writes for reputable title insurance companies that do business in Connecticut.

It’s Time To Buy Real Estate

Over the past few years we at the Hamad Law Firm, LLC, have watched as the real estate market – both residential and commercial – plummet from its heights to lows we never thought we’d see.  As you might imagine – and might be experiencing – this has scared away prospective property purchasers.  Homes and other buildings have sat on the market for months and years at a time, with buyers and sellers unwilling or unable to agree on a price that satisfies both, as well as any mortgage-holders.  Buyers don’t want to get involved, fearing further drops, and unwilling to pay even what sellers are willing to settle for.  With all of this going on, the market may be starting to turn – and you can get in on it early.

I’m not going to sit here and tell you that buying property right now is a sure thing – it never is.  But if you’re careful, if you study your opportunities, you can buy newer, nicer homes now for less money than ever before possible.  Don’t plan on flipping property (though it can be done), but rather on long-term ownership.  If you’re planning on buying for the long term, todays prices (and more importantly, interest rates), make the real estate market a good place to put your money.

Some points to consider:

First, as mentioned, consider what current interest rates are.  A 30-year fixed-rate mortgage can be had for under 4% right now – with no points.  If you’re looking at an FHA 30-year loan you may be able to reach as low as 3.75%.  A 15-year loan can be had as low as 3.25%.  If you are looking at short term investing, a 5/1 ARM product can be had as low as 2.75%.  At these rates, borrowing money has become so cheap it actually makes up a good portion of the savings on a home.

Consider this: At an interest rate of 6%, a conventional 30-year loan of $300,000 costs a total of over $647,000.  At 4%, this same loan costs about $132,000 less over 30-years – that’s almost half the amount of principal!  In monthly terms, the loan drops from $1798 to $1432, about $368 per month in savings.  That’s the incredible difference between interest rates of a few years ago, to interest rates now.

Now loans HAVE become more difficult to come by.  You do need to be well qualified (especially to get the best rates), and the more money you can bring to closing, the better.  But loans – many of them – are still being closed every day.  You can get loans with low credit scores (at least down to 620) and with almost no money to put down, if necessary.

Second, if you are currently renting a home (or office/business space), you’re paying somebody to, yes, handle things such as repairs for you, but you’re also paying for their profit margins.  With real estate prices so low, why do that?  If you have a steady job and you’re going to be in the same place for a number of years, you can settle yourself into your own home or space.  You no longer have to deal with the whims of a landlord or the risk of price increases.  In fact, rental vacancy rates are very low and going lower right now.  That is to say, so many people are renting rather than buying that it’s relatively hard to find available rentals, and when it is, prices are high and going higher.

Third, the market is weak.  This relates to pricing, which I think we can agree is obvious, but it also relates to the amount of choices you have.  There is a LOT of real estate on the market.  You can skip the real estate that requires fixing up, or has a bad roof, or whatever else.  You can have the place that you love, in the location that you love – not that you have to settle for.

In summary, if you have the ability to purchase real estate – for whatever purpose – now may be the time to do so.  A combination of low prices, low interest rates, and a large amounts of choice, makes this a great time to buy for certain purchasers.  Contact us today if you need help buying or selling a property, or even if you just need advice as to who to talk to in the mortgage market, the Realtor market, or anything else.

Apartment Vacancy Rates Hit 10-year Low

Research firm Reis announced today that apartment vacancy rates nationwide have hit a 10-year low, falling to 10%.  You can read the full article here.  More impressively, New Haven, Connecticut has the lowest vacancy rate of any city in the country, according to Reis, at 2.1%.  It has been previously reported that the downtown New Haven vacancy rate is under 1%, while outlying sections are somewhat higher.

If you are interested in purchasing rental property, or would simply like an attorney to look over a lease, contact the Hamad Law Firm today.

Merry Christmas & Happy Holidays

The Hamad Law Firm wishes everyone a happy and safe holidays this season.  We hope that 2011 has been as joyful for you as it has been for us, and we look forward to another great year in 2012.

Mortgage Rates Hit Record Lows

Did you know?  According to the AP, today, October 6, 2011, the average 30-year fixed rate mortgage price dropped to 3.94% – the first time that number has dropped below 4%.

Buying a house?  Refinancing?  Contact us today to handle the transaction.  If you don’t already have a real estate agent or a mortgage banker/broker, we can help you with that too.

Some Frequently Asked Real Estate Questions

There are some questions that just get asked all the time.  Rather than writing a full article on each, I’m just going to give some quick responses today.

Q: How Long is the Real Estate Closing Process

A: Well this depends – and for the most part, it doesn’t depend on the closing attorney.  The bank (in a refinance) or the bank and the seller (in a purchase) are going to be the determining factors – as well as you, the borrower.  If you get the bank all of the information they ask for, as soon as they ask for it, banks can usually get a refinance (or the bank side of a purchase) done in as little as 2-6 weeks.  You should also decide on your real estate attorney quickly, so that the attorney can get started.

Delaying factors could include a seller that is not ready to move, a bank that is just slow, or a title search that comes up with problems.

Q: How Long is a Real Estate Loan Closing Itself?

A: Real Estate Loan Closings usually take between 30 and 60 minutes.  Depending on the speed of the borrower and the attorney, and the size of the loan package, the closing may take up to two hours.

Q: Do Both Parties Sign in the Real Estate Loan Closing Process?

A: This question is mainly only relevant to purchases.  The only people that sign in the closing process are those who’s names are on title to the property.  This means that in a purchase, only the buyer/borrower is signing.  The seller will sign a deed, a transfer tax form, and a couple of other forms, but they are not part of the loan closing itself.

Q: I Want To Move My Property From Me to My Wholly Owned Business.  Do I Need A Lawyer?

A: This is a loaded question.  For the sake of this question, I am also going to assume that it is being asked about an LLC or Corporation and not a Sole Proprietorship.

If you have a current loan on your property, you will need the banks permission to transfer the loan to your business – even if you own the business yourself, and even if it uses pass-through taxation.  As to the actual question at hand – you do not have to have an attorney, but I never recommend doing property transfers without one.  A simple, seemingly innocuous mistake can make your life miserable down the line.

Q: In a Short Sale, is the Owner Really Off the Hook?

A: Maybe.  It depends on the exact agreement with the bank.  That being said, in most cases, yes, the bank will discharge the remainder of the debt – otherwise a short sale is fairly pointless for the borrower.

Q: Can a Bank Sell a Home Even After a Loan Modification?

A: Loan Modifications are tricky.  They contain a lot of complicated language and agreements.  If the loan modification has actually been granted and finalized, and you have adhered to the new terms, the bank probably cannot foreclose on, and sell, the home.  That being said, they usually do not grant a forbearance during the loan modification process – so they can still go after you right up until when they grant a modification.  Also, of course, once the modification is granted, if you don’t keep up payments, they can bring you into foreclosure all over again.

If you need help with any of these topics, don’t hesitate to contact the Hamad Law Firm, LLC, today.

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