Am I required to have an escrow account for my taxes and insurance with my mortgage payment?

That is a decision or a requirement that your lender will make whenever you apply for the loan. The usual case is if you’re getting a conventional loan and the loan – the value – meaning you’re only borrowing 80 percent or less of the value of the appraised value of the property, the lender may agree to let you pay your own taxes and insurance separately.

If however you’re getting an FHA loan or a VA loan or a high percentage loan meaning that you’re borrowing more than 80 percent of the appraised value, the lender is going to require you to escrow for taxes and insurance as well as possibly pay mortgage insurance each month, but that is something that you need to discuss with the lender when you make application for a mortgage as to whether or not the lender will allow you to pay your own taxes and insurance.

There’s another caveat to that is if you have that agreement with the loan originator, if they sell the loan to another servicer or another bank to accept your payments, the mortgage does provide that the successor lender can require you to pay or escrow for taxes and insurance which certainly wouldn’t make you very happy, but you do need to be aware that it is in the mortgage documents that it’s up to the lender to decide whether or not you have to escrow for taxes and insurance.

So, the answer to the question is: it’s up to your lender as whether or not you’ve got to have escrow for taxes and insurance with your mortgage payment.

If you have any questions, well give me a call at 727-847-2288.

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Is it legal for realtors to represent both the buyer and the seller in a real estate transaction?

The answer to that question is: yes, it is. That’s called a transactional broker and whenever you list the property, if you’re the seller, you will sign something where they’ll disclose that they will be acting as a transactional broker rather than a seller’s broker or a buyer’s broker and from my experience that a very, very high percentage – as much as 99 percent of the residential realtors serve as transactional brokers.

So, they take the listing and they advertise it and if a buyer happens to call someone else or the listing agent – the same realtor – well, they can then show it to the buyer and enter into a contract. They are really not representing either party.

The seller pays the real estate commission and they have a duty to deal in good faith or deal in good faith with both the seller and the buyer and there’s certain things that they should or should not do as far as in that capacity.

A transactional broker is different than a buyer’s agent. A buyer’s agent has only loyalty to the buyer and the buyer may be obligated to pay his own agent and the transaction and that should be disclosed as far as whenever the agent goes forward with the transaction.

And also you have exclusive seller’s agents from time to time and in commercial transactions it’s not unusual to have a agent who is the buyer’s agent and who’s the seller’s agent, but residential transactions, it’s almost the rule rather than it’s the exception to the rule where you don’t have the real estate broker serving as a transactual broker and dealing with both the buyer and the seller and really representing neither other than dealing in good faith with both.

If you have any questions about it or need to review your listing agreement, give me a call at 727-847-2288.

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What is a recourse loan? Well, most loans are recourse, so whenever you sign a promissory note, it says, “I promise to pay,” and whenever you sign that, it obligates you to pay the amount that is set forth in the promissory note, or in the loan documents. Almost all commercial paper and any loans that you get from banks or financial institutions, loan companies, anyone else, is it is going to be what they call recourse; means they have a right to sue you.

The opposite of recourse is non-recourse, and that is whenever the note says that they will not look to the maker for payment; they will look only to the collateral. So, probably the better question, or answer, to that is:  is that you want to sign non-recourse paper, meaning that they can’t sue you if for any deficiency they take back whatever collateral it be, whether it be automobiles or real estate. However, it is difficult to obtain these loans and most lenders want you to be personally liable for the loans or have recourse paper or a recourse loan.

If you have any questions about that, give me a call at 727-847-2288.

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What is a subprime mortgage?

Well, they are almost a thing of the past, but a subprime mortgage is one whenever someone had bad credit or did not have very good credit and they would not qualify for your regular, conventional mortgages. Therefore, they would end up paying a much higher interest rate or a higher closing cost, and there was a market for that prior to the passage of Dodd-Frank and the real estate crash.

A subprime mortgage is one where your credit isn’t great and therefore the interest rate is much higher, much higher risk for the lender, and so they call them subprime since you don’t have good credit, or the borrower doesn’t have good credit.

If you need to see about getting a loan and you don’t have good credit, well, give me a call at 727-847-2288 and I will see about heading you in the right direction.