What is title insurance and why do I need it when I purchase a home?
Title insurance is a form of indemnity insurance that insures you against financial losses caused by defects in title. Simply put, title is a legal way of saying that you own a right to something. To obtain title insurance for your new home, you pay a one-time premium, set by the New York State Insurance Department, that protects you as long as you own your home. Unlike traditional insurance, title insurance protects you against acts that have already occurred which threaten your ability to own and enjoy your property. For example, title insurance protects you against losses caused by forged deeds in the chain of title, fraud, undisclosed or missing heirs, and mistakes in the recording of legal documents.
What expenses will I have when I sell my home?
When selling a home, the largest expense is usually the seller's real estate commission, which typically ranges from 4% to 6% of the sale price. New York State also charges a transfer tax on certain types of real property, which is .04% of the sale price. A title company closer will charge a 'pick-up fee', usually ranging from $125 to $200 per mortgage, for taking on the responsibility of ensuring the final pay-off amount gets to the lender. Attorney's fees can range from $1,000 to $2,000 for the representation, depending upon the complexity of the transaction and any unforeseen title issues that may need to be resolved.
In total, a sellers closing costs can amount to between 8% to 10% of the home's sale price.
What expenses will I have when I purchase a home?
Purchasers have two distinct categories of 'fees' when buying a home: fees imposed by the lender as costs of making the loan, and closing fees associated with the purchase and transfer of the property to the new owner. Loan costs include application and origination fees, appraisal fees, discount points, pre-paid interest, and the bank attorney's fee, to name a few.
The purchaser's non-lender based fees are title search and recording fees, such as the costs for the title search and municipal searches, as well as the cost of the title insurance policy which protects the borrower and lender. Also, there are costs associated with recording the deed and transfer documents with the appropriate county land records office. New York State charges 'mortgage tax' on purchases of new homes, and if the borrowers have not put down at least 20% of the loan amount, the borrowers may have to pay private mortgage insurance (PMI) until the loan principal reaches a specified amount, typically 78% of the original value of the home.
On average, closing costs normally run between 2% and 7% of the purchase price, with 3% being average.
What is a power of attorney and what does it do?
A power of attorney is a binding legal document that allows a person, otherwise known as the principal, to appoint someone else as the principal's agent or agents. (You can appoint two agents, and the agents must act together.) The agent(s) can then perform specified acts on behalf of the principal. A power of attorney is beneficial in the event you become unable to manage your property or affairs. This document can be limited to a specific event, such as the purchase or sale of a home, or can be very broad in scope and give the agent extensive control over the affairs of the principal in the event of the principal's incapacitation.
When you give someone power of attorney you can specifically indicate what authority they have. You should make sure the person you are giving power of attorney to is trustworthy. To be effective, a power of attorney must be notarized. Finally, it is important to know that once the principal dies, the power of attorney dies with the principal and is of no further effect. If you are an agent, do not use powers granted in a power of attorney after the principal has died.
What is the difference between a living will and a health care proxy?
A living will is a document, addressed in general to your family and health care providers, that expresses your wishes and desires as they pertain to your health care treatment if you become physically or mentally incapable of conveying those desires yourself. Living wills in New York frequently include provisions addressing your wishes regarding the termination, or continuance, of life support and other extraordinary measures. There is no law governing living wills in the State of New York, but the highest court in this state has ruled for a living will to be valid, it must constitute 'clear and convincing' evidence of your wishes.
A health care proxy, on the other hand, is a document where you can designate a specific person to make health care decisions for you in the event you are physically or mentally incapable of making those decisions for yourself. You should have a discussion with the person you intend to nominate as your health care agent before you complete the form. Being a health care agent for someone is not an easy task. Your health care agent should be trustworthy and have your best interests at heart. This person must also be sophisticated enough to understand your medical circumstances and the health care system, and should have the fortitude to make the difficult decisions that you would want them to make. Finally, it's usually best to select someone who lives locally to be your health care agent, unless there are no suitable candidates.
How can I contact your office to schedule an appointment?
You can call our office at (845) 867-2250. You can also reach us by e-mail at [email protected]. We can meet with clients at locations in the Town of LaGrange (by Arlington High School), in the City of Poughkeepsie, and in the hamlet of Carmel on Gleneida Avenue. We can also meet remotely, via video conferencing, or simply over the phone. However you decide we will meet, your matter will receive the same attention.
