Protect Yourself with Home Finance
In this time where a lack of trust exists with banks, there are still benefits to seeking banked or brokered loans. From obtaining home value to securing insurance, the loan serves to protect the new home buyer in several ways.
According to USA Today, past homeowners and banks are claiming ownership of properties that have already been sold to new buyers. If a new buyer had gone through the channels of obtaining a bank loan, the standard procedures to acquire the property would have included the purchase of a title insurance policy to protect against such a claim. There is no denying the fact that the new bank is following the protocol to protect themselves; however, by default the new buyer is protected as well.
We have several investors in the marketplace who are purchasing homes to renovate and resell. We also have those who are purchasing them to improve and rent out. Additionally, we have homeowners who have just purchased a home to rehabilitate and live in as their own. Imagine the possibility of someone staking claim to the very home that has been improved with your own cash. This is happening all over the country and could have been avoided with the purchase of a title insurance policy.
How else does a bank loan protect my interest? A major portion of the underwriting determination comes from the appraisal report. Value is one of the most important aspects for the desire to purchase a property. The appraisal report will compare the property to others within one mile (if possible) to the subject property, with similar square footage, similar upgrades, etc.
It takes into consideration the age of the home, if it is on or abutting a major roadway, if it has views, etc. Although the appraisal work as of late has been lackluster at best, it will provide a rather conservative value to the home/real estate. It also serves as a key negotiating factor for your real estate agent who may be able to trim off some costs after its disclosure to all parties.
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