4 Steps to Regain Some Savings Self-Control

(TNS)—Opening a savings account is easy, but committing to savings? Now that can be hard.

From struggling to find places where you can reduce spending to falling into the temptation of instant retail gratification, saving money can be really challenging.

“You really have to know yourself and discipline yourself if you’re going to be an effective saver,” says Greg McBride, CFA, Bankrate’s chief financial analyst.

Learning to live on less may feel difficult initially, but it will pay off in the future.

Here are four steps to start exercising savings self-control today.

Pay your account out of your paycheck.
Automate your savings by having money moved to your savings account regularly, either through elections with your direct deposit if you receive a regular paycheck or by setting up a recurring transfer to your savings account.

Moving money directly to your savings account is a crucial first step in building a nest egg, McBride says.

“Paying yourself first clears the biggest hurdle for saving, which is simply not being in the habit of saving,” McBride says. “It takes care of saving money before you have a chance to spend it.”

Similar to putting money in your 401(k), the idea is that if it never touches your hand, you won’t miss it.

Avoid the temptation of transfers.
Moving money into your savings does you little good if you constantly raid the account.

To effectively grow a savings account, you have to restrict yourself from the temptation to transfer those funds to your checking account.

“If you’re going to build your savings, your deposits have to outnumber your withdrawals, not just in number but also in magnitude,” McBride says.

Do what it takes to control yourself. Perhaps the solution is as easy as naming that account based on a goal—”house down payment” or “Christmas money”—to make the connection of immediate gratification robbing your ultimate goal.

If that isn’t enough to stop you, put some distance between your checking and your savings. While there are often advantages of having your money at one institution, opening up a savings account a different bank might be what you need to stop you from spending money that is supposed to be away.

Once you’ve hit your emergency fund savings goal, you ought to consider a CD or even a CD ladder to pick up some yield and keep you from spending your money.

Put banking technology to work.
Banks and financial technology companies are obsessed right now with helping you save money, and each product seems to have its own bent.

There are ones that let you set rules, like adding $10 to your savings every time you buy a latte. Finn, the new mobile-only account Chase Bank is piloting in St. Louis for iOS users, is offering such features. The bank says it expects to launch it in additional cities and for Android users next year.

Others, like Simple and Moven, help you save for a specific goal or multiple goals at a time.

There are also some, like Digit, Chime and Acorns, that focus on moving small amounts of money into an account for you. This is similar to Bank of America’s popular Keep The Change Savings program, which puts the difference between your purchases and the nearest dollar in a savings account—$10.75 for lunch, 25 cents for savings, for example.

MoneyLion, another FinTech app, launched a virtual reality feature on the augmented reality platform of Apple’s iOS 11 release. MoneyLion customers with iPhones 6S and newer can now visualize their money as stacks on the phone. The rationale is that if you can see your money pile increasing, you’re less likely to spend it.

Suffice to say, there are a lot of savings options out there right now and you ought to do your research before committing to one. Ultimately, their effectiveness is dependent on your ability to not frivolously spend the money you’ve worked hard to save.

Save for the long term.
While you may want to enjoy the here and now, short-term spending can cost big time down the road.

“If you’re going to be a saver, it’s going to require some tough decisions,” McBride says. “It means passing up consumption today so that you can instead save for consumption in the future.”

McBride highlights that saving is not simply geared toward building up money to use in the event of emergencies.

“Americans are woefully under-saved for retirement,” McBride says.

McBride points to the increasing number of seniors who are unable to retire and the overwhelming amount of outstanding student debt as a reminder that consumers must save for long-term goals.

“You can build an emergency savings fund while building a retirement fund or a college fund at the same time,” McBride says. “You have to attack both at the same time in the same way by automating your contributions.”

©2017 Bankrate.com

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(TNS)—When people want to find out how much their mortgages cost, lenders often give them quotes that include loan rates and points.

What Is a Mortgage Point?
A mortgage point is a fee equal to 1 percent of the loan amount. A 30-year, $150,000 mortgage might have a rate of 7 percent but come with a charge of one mortgage point, or $1,500.

A lender can charge one, two or more mortgage points. There are two kinds of points:

  1. Discount points
  2. Origination points

Discount Points
These are actually prepaid interest on the mortgage loan. The more points you pay, the lower the interest rate on the loan and vice versa. Borrowers typically can pay anywhere from zero to three or four points, depending on how much they want to lower their rates. This kind of point is tax-deductible.

Origination Points
This is charged by the lender to cover the costs of making the loan. The origination fee is tax-deductible if it was used to obtain the mortgage and not to pay other closing costs. The IRS specifically states that if the fee is for items that would normally be itemized on a settlement statement, such as notary fees, preparation costs and inspection fees, it is not deductible.

How do you decide whether to pay mortgage points, and how many? That depends on a number of factors, such as:

  • How much money you have available to put down at closing
  • How long you plan on staying in your house

Points as prepaid interest reduce the interest rate—an advantage if you plan to stay in your home for a while—but if you need the lowest possible closing costs, choose the zero-point option on your loan program.

By the Numbers…
A lender might offer you a 30-year fixed mortgage of $165,000 at 6 percent interest with no points. The monthly mortgage principal and interest payment would be $989. If you pay two points at closing (that’s $3,300) you might be able to drop the interest rate down to 5.5 percent, with a monthly payment of $937. The savings difference would be $52 per month, but it would take 64 months to earn back the $3,300 spent upfront via lower payments. If you’re sure you will own the house for more than five years, you save money by paying the points.

©2017 Bankrate.com

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This article is intended for informational purposes only and should not be construed as professional advice. The opinions expressed in this article are those of the author and do not necessarily reflect the position of RISMedia.

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(TNS)—You’ve found the perfect house. Interest rates are still low. There’s just one thing standing between you and your dream home: a down payment.

Don’t abandon your homeownership dreams just yet. Here are nine ways to come up with the cash for your new home.

Pay Off Your Credit Cards
Paying bills will help in your hunt for down payment money. When you carry a credit card balance, the ever-accumulating interest charges mean more of your money goes to the card company each month. Keep that cash for yourself by cutting your debt load.

With the “avalanche” method, you prioritize your debts and pay the most on the one with the highest interest rate. Once that’s paid, shift your focus to the next highest rate and so on. You’ll get the most money-sucking credit card bills out of the way more quickly, freeing up more of your income to go toward building your savings.

Ladder CDs to Boost Savings
Once you have a few extra bucks, put it to work making more money for you. Certificates of deposit are low-risk and relatively accessible. But when interest rates are low, the return isn’t always what a saver hopes. You can maximize the earning power of CDs by opening different certificates at varying maturity dates.

For example, instead of buying one big CD, spread your money into three-month, six-month and one-year certificates. Known as laddering, this gives you flexibility to adjust your savings as rates change. Laddering allows you to lock in when rates are high and when rates are not so good. The process keeps you from being stuck for too long with low earnings.

Use Special Programs
There are many programs for homebuyers struggling to save for a down payment, especially for first-time homebuyers. Borrowers in a wide range of incomes, locales and professional groups may have access to aid from Fannie Mae and Freddie Mac, the government-sponsored offices that buy mortgages and package them as investments. Various nonprofit and community groups also lend a hand to buyers struggling to put money down on a home. And don’t forget about assistance from state agencies.

Tap Your IRA
If you’re looking to buy your first home, let the IRS help. Tax laws allow you to use up to $10,000 in IRA funds as a down payment if you’ve never owned a house. If you’re married and you both are first-time buyers, you each can pull from your retirement accounts, meaning a potential $20,000 down payment.

Even better is the IRS definition of “first-time homebuyer.” Technically, you don’t have to be purchasing your very first home. You qualify under the tax rules as long as you (or your spouse) did not own a principal residence at any time during the two years prior to the purchase of the new home. In these instances, Uncle Sam waives the penalty for early withdrawal, but you may owe tax on the money, depending on the type of IRA.

Get a Gift
Aunt Edna always liked you best. Take advantage of that favored family status and ask her to make a present of your down payment. Tax law allows gifts of several thousand dollars a year to be bestowed without tax consequences to either the giver or recipient. The gift-exclusion amount is $14,000 for 2017 and is adjusted annually for inflation.

The gift exclusion isn’t limited to relatives. The monetary present can be from anyone, so track down a well-off friend now.

Ask for a Raise
No luck finding a benefactor? Then maybe it’s time to ask your boss for more money. Just make sure you do your homework beforehand and base your request for a salary increase on your accomplishments rather than your needs.

Get a Second Job
Boss turned down your request for a raise? Moonlighting could help you earn the extra money. This option makes the most sense for those who are young and not yet fully established in their professional lives.

Look for Lost Money
Do you have any money stashed somewhere? Around $23.5 billion worth of matured savings bonds remains unredeemed, according to the Treasury Department, ignored by owners and not earning a penny of interest. Make sure your bonds and other investments are still adding to your net worth.

You could also have money languishing in an old bank account somewhere. You can file a claim with the Treasury to claim lost, stolen or destroyed savings bonds, or check the National Association of Unclaimed Property Administrators to see if you have any missing money.

Sell Unwanted Items
You likely have some used furniture you no longer use or old clothes that are no longer in style. Sell it to make a few more bucks to use for your down payment.

You can sell your items on sites like Craigslist, eBay, Facebook and Amazon to turn your trash into someone else’s treasure.

©2017 Bankrate.com

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(TNS)—Buying a house is a life-changing process that requires lots of upfront financial planning.

When looking for a home, keep certain factors in mind, including your financial situation, types of available loans, your credit score, the price of the house and your down payment so you can navigate the process smoothly.

Your Financial Situation
Before you buy a house, make sure that your monthly budget can handle such a large expense. Unless you’re one of the few people who can pay cash for a home, you’ll likely be paying it off for 15 or 30 years, depending on the length of your loan.

In addition to the mortgage payment, you’ll want to factor in expenses like property taxes, homeowners insurance and routine maintenance.

Types of Mortgages
When buying a home, you have a few options for the type of loan you want to use. Two of the most common mortgage types are fixed-rate and adjustable-rate mortgages.

The interest rate on a fixed-rate mortgage stays the same over the life of the loan, with payments divided up into equal amounts that you pay on a monthly basis. The longer the loan term, the less you have to pay each month; however, you’ll likely pay more in interest than you would with a shorter-term loan.

An adjustable-rate mortgage, or ARM, has a fixed interest rate for an initial period, followed by a period when the lender may periodically adjust the interest rate. For example, a 5/1 ARM has an introductory rate of five years. After that five-year period, the interest rate can change annually. With an ARM, you need to consider how much your monthly payment could increase and your ability to pay if it does go up.

Your Credit Score
You also need to review your credit score before buying a house. Your credit score helps creditors determine your creditworthiness. Borrowers with credit scores of 740 or higher generally qualify for the best mortgage deals.

It’s still possible to buy a house if you have bad credit. You likely will have to accept a higher interest rate on your mortgage, which could cost you hundreds of dollars extra per month.

If your credit score drops too low, though, you might not qualify for a mortgage at all. Consider improving your credit score first before trying to buy a house.

The Price of the Home
The higher the price of the house you want to buy, the more you can expect to pay on a monthly basis. When looking at houses, consider your budget and how much you can afford to spend.

Remember to consider your needs, too. Do you have a new addition to the family and need the room? Have your kids moved out and you want a smaller home?

Also, take a look at the price range of the houses available in the area where you want to buy. Compare the prices you find to your budget and determine what home you can afford.

The Down Payment
A large down payment represents one way to reduce the monthly cost of your mortgage. As a matter of fact, a down payment of 20 percent gives you access to better interest rates and prevents you from having to pay private mortgage insurance. So, in addition to lowering the amount you owe initially, a down payment also can get you a lower interest rate, making a house more affordable. There are also mortgages that require no down payment or a small one.

©2017 Bankrate.com

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(TNS)—You’re buying a home and you need a mortgage. How do you choose the right lender—one that will offer not only the best deal, but also good customer service?

You’ll find no shortage of banks, online lenders, mortgage brokers and other players eager to take your loan application. Here are five tips for selecting the best mortgage lender out of the bunch.

Compare Offers and Lenders
Start getting familiar with various lenders and the deals they’re offering by browsing through mortgage rates.

Lenders will “present price differently,” notes Robert Davis, an executive vice president at the American Bankers Association (ABA). “Some lower rates might include fees with it, so the annual percentage rate is different than what you might think.”

Also, understand that some lenders specialize. One might be a good choice if you’re financing a condo, while others might offer a better deal if you’re building your home from scratch. You’ll want to have a general idea of the type of property you’re interested in.

Check With Lenders and People You Know
You might find the right mortgage and the best lender without having to look very far. Go to the bank or credit union where you have a checking or savings account and ask about the types of mortgage deals that are available to current customers.

Compare any offer against what other lenders in your area and online and large national lenders will give you.

“Interest rates change as much as three or four times a day, so get quotes from three different (lenders) to increase your odds,” says Brian Koss, executive vice president of Mortgage Network.

Be sure to ask family members and friends for referrals to loan officers and mortgage brokers who gave them good, professional service and helped them find the most competitive loans.

Decide: DIY or Hire a Broker?
One important decision is whether to seek out a mortgage and lender completely on your own or use the services of a mortgage broker.

A broker can help with your comparison-shopping by gathering quotes from several lenders, but it’s important to understand that a broker isn’t obligated to find the deal that’s best for you.

If you decide to work with a mortgage broker, it’s wise to look at how the loan offers from the broker size up against those you find on your own.

Look at differences in rates, fees, mortgage insurance and down payments—and compare what your bottom-line costs will be.

Talk With Your Real Estate Agent
Be sure to ask your real estate agent for lender recommendations. Smart loan officers rely on that business and take good care of the clients sent their way by local real estate agents.

Keep in mind that agents might have relationships with certain lenders, so when your agent gives you a name, ask whether there is any affiliation.

While some real estate brokerages have their own favored in-house mortgage lending businesses, good agents will not limit their referrals to those particular lenders.

Be Ready for a Possible Hand-Off
Many lenders will end up selling your mortgage to the secondary market, which means you will likely have a different company servicing your loan than your original lender.

This transfer is often outside your control, but you can ask the lender whether it knows if your mortgage will end up being serviced by a different company. If you want a lender you can reach out to immediately if problems arise, finding one who will hold onto your mortgage might be the best option.

“If it’s important for you to have local contact with the lender, then you’ve got to go to a bank that keeps your mortgage,” says Davis.

©2017 Bankrate.com

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This article is intended for informational purposes only and should not be construed as professional advice. The opinions expressed in this article are those of the author and do not necessarily reflect the position of RISMedia.

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(TNS)—If you’re concerned about getting approved for a conventional mortgage, keep your dreams of homeownership alive by considering a mortgage insured by the Federal Housing Administration. For borrowers who meet FHA requirements, this mortgage alternative is a terrific way to buy a home with a low down payment and less-than-perfect credit.

What Are the Requirements for an FHA Loan?
In order to obtain approval for an FHA loan, the borrower must satisfy the following requirements:

  • Steady Employment History – Borrowers typically must have been regularly employed within the past two years. Self-employed borrowers have to prove that their business has drawn stable income for at least two years; verification, such as tax returns or company documents, is required.
  • Ability to Pay – This is determined by two formulas: the front-end ratio and the back-end ratio. The front-end ratio refers to the entire amount that the borrower spends on housing costs, and it must be less than 31 percent of the borrower’s gross income, with some exceptions that push limit up to 40 percent. This includes expenses such as the principal, interest, property taxes, homeowners association fees, mortgage insurance, and homeowner’s insurance. A borrower’s back-end ratio, also known as the debt-to-income ratio, encompasses all of the borrower’s debts, including the mortgage payment, credit debt, and personal loans, and it should be less than 43 percent.
  • Financial Soundness – The borrower must have a credit score of at least 580 and be able to afford a minimum down payment of 3.5 percent. Some institutions may accommodate lower credit scores if the borrower is able to pay a larger down payment. She must be a minimum of two years out of bankruptcy and not have a foreclosure in the past three years. All her federal student loans and income taxes must be current.
  • Residency – The borrower must be a lawful U.S. resident with a valid Social Security number, and she must be the occupant of the home.

What Costs Are Associated With an FHA Mortgage?
Like conventional mortgages, there are costs associated with FHA loans that the borrower has to pay when the loan closes, including lender fees, prepaid interest, inspection expenses, and attorney fees. The FHA mortgage program permits lenders and property sellers to pay some or all of the buyer’s closing costs.

To insure the mortgage against default, the borrower must also pay an annual mortgage insurance premium. The MIP varies based on the terms of the loan, including the principal, loan-to-value ratio, and term. On average, expect to pay 0.85 percent of the loan amount each year.

Borrowers may be required to pay a one-time additional mortgage insurance fee at the time of closing, called the Up-front Mortgage Insurance Premium. As of 2017, the UFMIP is equal to 1.75 percent of the mortgage.

Want to learn how long it’ll take you to pay off your mortgage? Run the numbers through Bankrate’s mortgage calculators.

What Are the Disadvantages of an FHA Mortgage?
Since an FHA loan permits a lower down payment, you can expect to pay more interest over the life of the loan than you would with a conventional mortgage that necessitates a larger down payment.

Visit Bankrate online at www.bankrate.com.

©2017 Bankrate.com
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(TNS)—Lenders use your credit score to determine whether you are eligible for a loan and to decide what terms they are prepared to offer. Credit bureaus keep track of when companies check your score, regardless of the outcome, and checks designated as “hard inquiries” may lower your score.

Understanding what constitutes a hard check versus a “soft” check makes it easier to plan how you intend to apply for new credit lines, thereby minimizing the risk of harming your credit score.

Soft Credit Checks Are Listed on Your Credit Report

A soft credit check, otherwise known as a soft inquiry or soft pull, is any kind of credit report check that doesn’t affect your credit score. Soft inquiries are background checks rather than checks occurring as a result of new loan applications; in some cases they happen without your knowledge or consent.

Common soft inquiries include:

  • When you check your own credit report
  • When a potential employer checks your credit history to determine your reliability and financial status
  • When a financial institute you patronize checks your credit
  • When credit card issuers check your credit to send you a preapproved offer

You can see all of the soft inquiries on your credit report, which lists each check along with the name of the organization that made the check.

Soft Credit Inquiries vs. Hard Credit Inquiries

Unlike soft inquiries, hard inquiries may have an impact on your credit score. Prospective lenders make hard checks when they are making a lending decision, with common examples including:

  • Applying for a new credit card
  • Taking out a loan for a new car
  • Applying for a mortgage

Hard inquiries stay on your credit report for two years, so you should always think carefully before making any kind of loan application as it can lower your credit score.

Be Smart About Applying for Loans

A good credit score is an essential part of getting approval for a new line of credit, and it also improves your chances of getting the best rates. It’s important to know what kind of activity has the potential to lower your score.

Many companies check your credit history, but only hard checks made to verify your eligibility for a new line of credit have a direct impact on your credit score. To maintain your credit score, apply only for loans when you really need them. If you are shopping for the best rates, make all of your applications within a short time frame.

©2017 Bankrate.com

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Real estate is the long-term investment of choice for Americans, who in a recent survey by Bankrate.com placed it ahead of bonds, cash, gold and stocks as the best method of building wealth over time. Real estate is now the chosen vehicle for the third consecutive time in the survey:

  • Real Estate (28 percent)
  • Cash (23 percent)
  • Stocks (17 percent)
  • Gold/Other Precious Metals (15 percent)
  • Bonds (4 percent)

Stocks have never been highly favored in the survey, despite their tendency to produce significant returns for investors who have a wide enough window to weather swings.

“We’ve begun to see rising yields on savings accounts,” says Mark Hamrick, senior economic analyst at Bankrate.com. “However, the preferences for cash and real estate indicate that too many people are leaving money on the virtual table by failing to be sufficiently exposed to the stock market, where higher long-term returns are found. This is especially the case for younger investors, who are in the best position to weather the inevitable short-term market volatility.”

Source: Bankrate.com

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(TNS)—The housing market crash has become a distant memory, and home prices are looking healthy again. But does that mean there are good opportunities for investing in the residential real estate market?

Home values are climbing in most places. According to the National Association of REALTORS®, or NAR, 85 percent of major metro areas saw gains in prices for existing single-family homes during the first quarter of 2017, while 14 percent just saw prices decline.

But while interest rates remain low, the days of quick, easy financing are over, and the tightened credit market can make it tough to secure loans for investment properties. Still, a little creativity and preparation can bring financing within reach of many real estate investors.

If you’re ready to borrow for a residential investment property, these five tips can improve your chances of success.

Make a Sizable Down Payment
Since mortgage insurance won’t cover investment properties, you’ll need to put at least 20 percent down to secure traditional financing. If you can put down 25 percent, you may qualify for an even better interest rate, says mortgage broker Todd Huettner, president of Huettner Capital in Denver.

If you don’t have the down payment money, you can try to obtain a second mortgage on the property, but it’s likely to be an uphill struggle.

Be a ‘Strong Borrower’
Although many factors—among them the loan-to-value ratio and the policies of the lender you’re dealing with—can influence the terms of a loan on an investment property, you’ll want to check your credit score before attempting a deal.

“Below (a score of) 740, it can start to cost you additional money for the same interest rate,” Huettner says. “Below 740, you will have to pay a fee to have the interest rate stay the same. That can range from one-quarter of a point to two points to keep the same rate.”

The alternative to paying points if your score is below 740 is to accept a higher interest rate.

In addition, having reserves in the bank to pay all your expenses—personal and investment-related—for at least six months has become part of the lending equation.

“If you have multiple rental properties, (lenders) now want reserves for each property,” Huettner says. “That way, if you have vacancies, you’re not dead.”

Shy Away From Big Banks
If your down payment isn’t quite as big as it should be or if you have other extenuating circumstances, consider going to a neighborhood bank for financing rather than a large national financial institution.

“They’re going to have a little more flexibility,” Huettner says. They also may know the local market better and have more interest in investing locally.

Mortgage brokers are another good option because they have access to a wide range of loan products—but do some research before settling on one.

“What is their background?” Huettner asks. “Do they have a college degree? Do they belong to any professional organizations? You have to do a little bit of due diligence.”

Ask for Owner Financing
A request for owner financing used to make sellers suspicious of potential buyers, during the days when almost anyone could qualify for a bank loan. Now, it’s more acceptable due to the tightening of credit; however, you should have a game plan if you decide to go this route.

“You have to say, ‘I would like to do owner financing with this amount of money and these terms,'” Huettner says. “You have to sell the seller on owner financing, and on you.”

Think Creatively
If you’re looking at a good property with a high chance of profit, consider securing a down payment or renovation money through a home equity line of credit, from credit cards or even via some life insurance policies, says Ben Spofford, an Ohio home remodeler and former real estate investor.

Financing for the actual purchase of the property might be possible through private, personal loans from peer-to-peer lending sites like Prosper and LendingClub, which connect investors with individual lenders.

Just be aware that you may be met with some skepticism, especially if you don’t have a long history of successful real estate investments. Some peer-to-peer groups also require that your credit history meet certain criteria.

“When you’re borrowing from a person as opposed to an entity, that person is generally going to be more conservative and more protective of giving their money to a stranger,” Spofford says.

©2017 Bankrate.com

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(TNS)—When you find the home of your dreams, make an offer and apply for a mortgage, you might not give much thought to the cost of title insurance—but that can be a mistake.

A title policy defends buyers (and their lenders) from future property ownership claims, surprise liens and other potentially costly complications with property titles.

Homebuyers usually purchase title insurance as part of closing costs and often take the first title insurer suggested by the seller, says Rafael Castellanos, founder of a title insurance agency in New York.

Unfortunately, many buyers get sticker shock when they realize how much title insurance is. “The fees are generally about 1 percent of the loan amount,” Castellanos says.

However, buyers can cut the cost of a title insurance policy by hundreds of dollars if they are willing to ask questions and get independent guidance.

Here are four ways you can save money on title insurance.

Shop Around for the Best Deal
Title insurance involves a two-part process. First, a search of a property’s title history is conducted to look for errors or problems with the deed. Then, an insurance policy is underwritten to protect the buyer if any issues are discovered.

In several states, insurance providers are allowed to set their own prices, which means the insurance premiums can vary widely. Homebuyers won’t know which title companies offer the best rates unless they shop around.

A good place to start comparison-shopping is the website of the American Land Title Association, which provides a search engine based on geography.

Another option is to ask an independent attorney for help in understanding local regulations, costs involved and insurance company recommendations.

“Buyers need someone who has an independent thought and who is well-versed in real estate,” Castellanos says. “The best person for that is often an attorney.”

Negotiate the Add-On Fees
In states where insurance is highly regulated, title insurers don’t have much wiggle room on their rates. So, homebuyers won’t find much difference in premiums from one company to another.

However, in nearly all cases, extra fees are part of the transaction when you buy a title insurance policy. These add-on expenses include mail and courier charges, copy fees, and costs for searches and certificates—and these charges can be negotiable, even when the insurance premiums are not.

Experts say you often can reduce these costs simply by calling the title insurance company and asking to have some of the fees removed. If the insurer balks, you can always look for another provider.

Ask for the ‘Simultaneous Issue Rate’
Homebuyers purchase title insurance to protect themselves. At the same time, their mortgage company will likely require that a separate insurance policy be issued in the lender’s name.

It is typically the borrower’s responsibility to pay for both.

“The bank partners with you,” Castellanos explains, “but they need to be protected and confident that they have a valid first lien against the property, so they require this insurance.”

Although the two insurance policies are independent of one other, borrowers can buy them together and save.

“When the policies are issued at the same time, in some states there is something called the ‘simultaneous issue rate,'” Castellanos says. It includes a highly discounted premium for the lender’s insurance.

As a result, the total title cost for both policies is usually a lot less than if they were purchased independent of each other. Always be sure to ask for this discount.

Ask the Seller to Pay for Your Policy
When a local real estate market favors buyers over sellers, homebuyers may feel emboldened to ask sellers to pay for title insurance.

That used to be a very unusual request; however, in a buyer’s market, sellers are motivated and may be more willing to negotiate.

“You will see people financially negotiating on every term, including asking someone to pay for their title insurance,” says Edward Mermelstein, a real estate attorney in New York.

However, he cautions buyers not to lose sight of the overall goal, which is to close the sale.

There are many other concessions buyers can ask for in a deal—such as a reduced purchase price or a home warranty—that save even more money than having the seller pay for title insurance.

©2017 Bankrate.com

Distributed by Tribune Content Agency, LLC

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The post 4 Ways Every Homebuyer Can Save on Title Insurance appeared first on RISMedia.

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