All Forum Posts by: Nana Sefa

Hi Guys,

I have a SFH in AZ that currently has a 8.25% DSCR 5 year prepayment penalty of 15k. I have a 800+ credit score and a one year lease in place that is 1.00 of the PITI. Current loan balance is 302k. Current value based off Zillow is 435k.

Please let me know if you guys think I should refinance with this quote from a lender or wait until the prepayment penalty is gone. I have 4 years left before the 15k prepayment penalty is gone on the current mortgage. 

LTV- 75%

DSCR 6.75% this rate will bring my mortgage from 2285 to 2116

Pre-Payment Penalty 5-4-3-2-1%

Loan origination 1.5%

Buydown option 1.5% to make it 6.375% this rate will bring my mortgage from 2285 to 2035

Appraisal 725$

Underwriting- 1295$

Thank you guys! 

I am looking for a home inspection company in the DMV that guarantees their work.  I had a company in Michigan that would guarantee to pay to fix any major miss that are discovered within 90 days of their inspection. Looking for a company that offer similar guarantee in the DMV. Thank you.  

Happy to look at an FHA with you!

House hacking is a great starting strategy.

 Good morning, have a clear title is a marketable asset for any Buyer, future owner. 

Title, insurance and surveys are two of the most important tools you can get when purchasing a property. Not to mention it will also help you sell the property if you intend to flip or sell in the future.

You're right of course that some protection extends past the 6 weeks of ownership, and I was clumsy or mistaken describing it otherwise. 

Nevertheless that anecdote shows risk is nonzero, but nothing further. The risks are lower than if I continued to own the property myself. The rational thing to do is to compare the risk and risk premium and make a decision to self-insure or not based on my risk tolerance, it's an obligation of rationality. I do not think you are disagreeing with that. 

Here is what confuses me about the one-time premium. If I have a 30yr mortgage the lender does not require title insurance updated every 5 years. But if I rate/term refi with the same lender after 5 years, title insurance is required to be paid again. Why? I get the old loan is paid off and the insurance goes with it but why can't it just be transferred to the new nearly-identical loan. It doesn't make sense to me. 

Here are a couple more examples of when the existence of a loan policy won't help the owner... encroachments, boundary issues, forced removal of improvements due to building permit and code issues, title issues that would not affect the lender's lien... or at least would most likely not cause the lender to take action which might help the uninsured owner.

And the reason another loan policy is required in connection with a refinance (in addition to the obvious reason -- there is a new insured) is that the period of time in which a defect might arise has just been extended to the date of the new policy. After all, the purpose of the new policy is to insure the lender that its new lien is in first (typically) position. No new policy = no new money loaned.

@Jay Hinrichs Yes exactly, I think this is a rational way to do it in many cases. 

@Rob K. I'll respond to this since I hear the undertones towards what I have just been posting about. Obviously an anecdote about a single case where someone would have benefitted from purchasing insurance is not evidence supporting that insurance should 'always be purchased'. The fact that the risk is nonzero does not mean the risk is high enough to pay any price for insurance. Title risk is real, it's just unlikely. Calculate the risk and the risk premium and make a rational decision, it's investing 101. 

That's another area where the title insurance payment structure does not make sense, on a refi. On a refinance you have to get the title insurance 're-issued'. Basically you have to pay again just to change the lender. If you change the lender on your hazard insurance you do not have to buy a whole new policy. This does not make sense to me. If you have any light to shed on that Rob I'm open to hearing. 

Most other developed economies like Japan and most of Europe have gov't backed title, a few other countries have a hybrid structure, and it is really only the US and Canada that are all about private title. We are a bit of an outlier as a country. 

I think the private title industry made sense for a US that is more prone to litigation and was forced to keep private records. As we transition to electronic records and the chance of title issues from paper records fades into the decades I hope the heat from reform efforts breaks through to the regulations to create a system that is more optimal.