5 first-time homebuyer mistakes to avoid

5 first-time homebuyer mistakes to avoid

The first-time homebuyer process is a lengthy one, and if you’re not careful, there’s a lot that can throw you off-track.

From low appraisals to surprise credit checks, a number of hurdles could slow your purchase or even derail it altogether.

Are you on the hunt for a new home? Want to make sure your purchase goes off without a hitch? Then take steps to avoid these all-too-common first-time homebuyer mistakes:

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1. Home insurance hiccups

Your lender is going to require an adequate home insurance policy before they’ll close on your loan. If you forget to secure one or your policy start date doesn’t align with your closing, it could throw things off schedule. 

There also may be cases when a home isn’t insurable. This might occur if the previous homeowner made an insurance claim for some sort of high-risk condition — like mold or severe water damage.

2. Low appraisals

Not many first-time homebuyers have a good understanding of appraisals. To put it simply, if your appraisal comes in lower than your offer, it could send things back to square one. You’ll either need to pay the difference, renegotiate with the seller or back out of the deal entirely. Your lender won’t cover more than the appraised value.

To prevent this, always do your research before submitting an offer. Look at comparable sales in the area and ask your agent to help you determine a right-sized bid that aligns with those numbers. 

3. Credit problems

Many lenders will re-check your credit just before closing on your loan. This can be problematic if you’ve made any major purchases in the last few weeks or if you’ve applied for other loans or credit cards in that time. 

Fortunately, this is an easy one to avoid. Just keep a tight rein on your spending in the weeks leading up to your home purchase, and save big-ticket buys like furniture and new cars until after you’ve closed on your loan.

4. Errors on homebuyer loan docs

If you spot an issue on your final closing disclosures or your name is misspelled on your loan documents, it could delay your closing. Your lender will need to amend the paperwork before it can be signed and notarized.

As a first-time homebuyer, it’s critical to review any documents you receive from your lender right away. If there’s an error, report it to your loan officer as soon as possible.

5. Problematic walkthroughs

Before you close on your loan, you’ll have the opportunity to walk through the house one more time, making sure any repairs you requested were done and that the owners cleared out their property and left the place in good condition. 

If that’s not the scenario you walk into, you’ll have to work with your agent to resolve the issue. They may need to ask for closing cost credits to help you cover any additional repairs, cleaning or trash removal services that might be necessary due to the seller’s negligence.

Be a proactive first-time homebuyer

As a first-time homebuyer, you want your home purchase to stay on track, and it’s important to be proactive as you approach the big day. Keep your spending in check, attend your walkthrough as early as possible and be thorough when reviewing your loan documents. The quicker you catch a potential issue, the less likely it will derail your transaction. 
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States Title raises $150M for home closing tech

States Title raises 0M for home closing tech
Title insurance upstart States Title announced this week $150 million in debt financing from HSCM Bermuda, which will go towards developing a more modern home closing experience.

CEO Max Simkoff said the financing will held them “wipe the system clean” and build a homebuying system from scratch – one that is simple, efficient and digital, he added.

“Home buying, which is already stressful and overwhelming, should set the standard for easing customers’ journeys rather than lagging behind other digital solutions,” Simkoff said in a statement. “[HSCM] sees immense value in how we are overhauling the system and, together, we now have greater capacity to tackle this enormous market, with significant tailwind behind what we’re doing.”

The financing follows a $123 million Series C filed last May, which went towards States Title’s continued goal of digitizing real estate closings.

The debt financing will go towards product development, investment in go-to-market growth, and the refinance of debt to Lennar Corp., which helped fund the 2019 acquisition of North American Title Co. (NATC) and North American Title Insurance Co. 

After acquiring NATC’s underwriting in 2019, State Title’s intelligence platform suddenly had volumes of publicly-available closing data. As a result, State Title was able to patent technology that removed entire chunks of the closing process.

Now, even more cash will be allotted towards the company’s technological advances in the field of homebuying, Simkoff said.

“The platform benefits lenders, real estate professionals, title agents, and homeowners, and has become even more crucial as the impacts of COVID-19 and record-low interest rates have created a huge tailwind behind home purchase and refinance,” he said.

States Title focuses on technology in its services, using data science to “create predictive title insurance based on an assigned risk score to indicate how safe a property is from liens or liabilities, helping to achieve faster title processing and more efficient underwriting.”

From 2018 to 2019, State Title grew transaction volume by 100x, according to the company.
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Flagstar’s Courtney Thompson to speak at Spring Summit

Flagstar’s Courtney Thompson to speak at Spring Summit
Courtney Thompson, senior vice president of default mortgage at Flagstar Bank, will speak on a panel titled Servicing Challenges in a Pandemic Period at HousingWire’s Spring Summit on March 4.

Thompson leads Flagstar’s default mortgage operations team, delivering industry-leading transparency into the default mortgage servicing process. Prior to coming to Flagstar in 2014, Thompson had 15 years of consulting experience in the default arena. 

With millions of homeowners taking advantage of mortgage forbearance options, servicers have scaled staff and operations to make sure borrowers are being served appropriately. Thompson’s panel will discuss what that looks like, especially as forbearance timelines get extended.

The Summit’s packed agenda has 14 sessions, with topics including:

Mortgage disruption outlookOperational strategies in the current marketeClosing/RON updateA new regulatory regime

The summit also features sessions on lessons from local markets, an economic update and more.

As with all HousingWire events, we’re bringing together some of the brightest and most successful people in mortgage, real estate, compliance, security, technology and regulation to offer their insights on what’s happening right now and what’s coming next.

In addition to Thompson, we’re featuring UWM CEO Mat Ishbia, CoreLogic’s  Selma Hepp, Mortgage Champions CEO Dale Vermillion, Lead Analyst Logan Mohtashami, top Century 21 Realtor Xio Sandoval, the MBA’s Lisa Haynes, and many more.

The 2021 Spring Summit is designed for our HW+ premium members, who get access to all HousingWire virtual events, long-form digital content published weekly, an exclusive Slack community and more. Sign up for HW+ membership and register for the summit here, or get event-only access for your company or team here.
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Stewart Title capitalized on refi wave with strong Q4 2020

Stewart Title capitalized on refi wave with strong Q4 2020
Following an impressive fourth quarter, Stewart Title announced a 10% increase in the company’s annual cash dividend to $1.32 per share.

Fred Eppinger, Stewart CEO, said he asked the company’s Board of Directors for the increase in order to be consistent with shareholders.

“The increased annual dividend is directly related to the strong fourth quarter and year-end revenue growth Stewart saw across all lines of business and by continuing to effectively manage our cost structure to increase our margins,” Eppinger said.

Driven by historic mortgage originations, Stewart reported net income of $59.7 million in the fourth quarter, impressive considering that it only broke even during the fourth quarter of 2019. Operating revenues checked in at $728.3 million, an increase of $215.6 million, or 42%, higher than the third quarter. For the full year, Stewart pulled in $154.9 million in earnings, about double the $78.6 million it made in 2019.

Stewart’s non-commercial domestic title revenue checked in at $239.7 million in the fourth quarter, a 61% jump on the $149.1 million registered in the fourth quarter of 2019. The firm opened nearly 66,000 purchase title orders in the quarter and nearly 81,000 refinancings during the same period. The refi orders doubled from the year prior.

“Our fourth quarter 2020 results were driven by revenue growth across all lines of business and by actively managing our cost structure,” Eppinger said in a statement. “Even with real estate trends remaining strong through the fourth quarter, I was especially encouraged to see solid performance across all major channels, including purchase, refinancing, commercial, international and ancillary services.”

It’s been an eventful few months for the company, which acquired six companies, 57 offices, and an additional 600 employees in September. It also grew its Alaska operations with the acquisition of Yukon Title.

“We’re going to be able to have the depth and capability in those markets to be the best every day,” Eppinger said.

Then, it October, Stewart acquired valuation services company Pro Teck Valuation Intelligence, followed by an announced November partnership with money transfer protection company CertifID and a December acquisition of NotaryCam, a top online notarization provider and mortgage eClosings solutions provider.

Looking to expand not just its physical presence but also its tech offerings, the 2020 HW Tech100 Real Estate winner says it will look to buff up remote online notarization capabilities across industries and geographies with its acquisition of NotaryCam.

“NotaryCam has seen significant growth and adoption over the years, specifically with forward-thinking industry partners like Stewart Title, and today we take the next step in expanding our customer-centric culture to service our individual and enterprise-level customers, across all industries along with the real estate industry, by joining Fred and the Stewart team,” NotaryCam Founder Rick Triola said.

Stewart also added several Western U.S. operations through ET Investments last year, strengthening the company’s presence in Arizona, Colorado and Nevada.
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Stewart fourth-quarter profits increase

Stewart fourth-quarter profits increase
Stewart’s CEO Fred Eppinger said the company’s fourth-quarter performance was “driven by revenue growth across all lines of business and by actively managing our cost structure.” Read on for more details from the company’s latest earnings statement.
Source: thetitlereport.com

Title Alliance produces record profits

Title Alliance produces record profits
Title Alliance, Ltd. ended 2020 with its highest joint venture profits ever, the company announced. Read on for more details about Title Alliance’s 2020 performance.
Source: thetitlereport.com

CoreLogic launches digital title-and-closing solution

CoreLogic launches digital title-and-closing solution
CoreLogic has launched a new digital title-and-closing solution it said will aid in simplifying, streamlining, and orchestrating the collateral underwriting process. Read on to learn more.
Source: thetitlereport.com