The lender on the mortgage will typically require that the mortgaged property be insured throughout the life of the mortgage. This is typically paid by the buyer, but may be reimbursed by the seller. The entire first year of the insurance premium can be required by the lender, which can be added to closing costs if the buyer has not already paid the insurance company directly.

A home warranty can be purchased by either the buyer or the seller, with the buyer deciding to add it at closing and the seller using it as part of their marketing strategy to sell the home by offering the warranty.

Home warranties are purchased for resale homes to insure the major household systems against repair or replacement in the first year of ownership. It’s a way to make sure that for the first year of owning a home, the new homeowner is protected against appliance breakdown resulting in them having to spend hundreds or thousands of dollars on repairs and replacements.

Home Warranties are optional and are typically not required by lenders as a condition of the mortgage loan.

Recent News about the Home Affordable Refinance Program

On October 24, 2011 the Federal Housing Finance Administration, with Fannie Mae and Freddie Mac, announced changes to the Home Affordable Refinance Program (HARP) to make it easier for certain homeowners to refinance their home mortgages and take advantage of historically low interest rates currently available.

Specifically, HARP is designed to allow qualified borrowers to refinance without the cost of Mortgage Insurance EVEN IF the market value of their property has fallen to the point that they currently have little or no equity in their property (but only if the borrower is not currently paying for MI).

Q:           Who is eligible for HARP?

A:            Only borrowers whose existing mortgage was sold to Fannie Mae or Freddie Mac prior to June 1,             2009.  And, borrowers must be current on their mortgage payments with no late payment in the     past 6 months and no more than one late payment in the past 12 months.

Q:           How do I know if my mortgage is owned by Fannie Mae or Freddie Mac:

A:            For Fannie Mae, go to:  www.FannieMae.com/loanlookup/ or call 800-7FANNIE.

                For Freddie Mac, go to:  ww3.FreddieMac.com/corporate/ or call 800-FREDDIE.

Q:           When are the changes effective?

A:            Fannie and Freddie will provide additional information to lenders by November 15. We don’t yet             know the timetable for implementing the changes, but CapCenter will move as quickly as                possible after this information is available.

Q:           Does a borrower have to refinance through their current loan servicer?

A:            No, a borrower may choose a different lender.  CapCenter is able to help borrowers whose loans            are owned by Fannie Mae.

Q:           May I increase my loan amount to get some extra cash?              

A:            No, this only applies to borrowers who are interested in refinancing only their outstanding          balance.

Q:           Should I wait to refinance until these changes are implemented?

A:            Given the historically low rates currently available, we generally suggest that borrowers do not                 wait, but we would be glad to discuss your specific situation with you.

Please check back with us on November 15 for additional information.

An Inspection Fee is a fee paid from the buyer (though occasionally by the seller) to a licensed home, pest, or other inspector. Some lenders will require inspections for things like termites to verify the property is in good condition and to ensure that the property will retain its collateral value in order to secure the mortgage.

Inspections are beneficial to the buyers as well since they can help identify problems that may not be readily apparent for a variety of reasons, helping to save money down the line or to push you towards another home.