When accepting a loan for a specific purpose, you are obligated to use it for that intended purpose. Using the loan for other reasons is actually illegal. The lender will not be happy and may even file a legal action against you. Here we will have a look into what some of the outcomes are and what you should really do if you need a loan, but truthfully.

Usually when you apply for a loan the lender will want to know how you are spending the money and they will usually put a restriction on the use of the loan. This is all done for a good reason. They need to know that their money isn’t going to be wasted. Depending on what the loan is, you will have a variety of fees and interests rates that usually go up when the loan has a high risk borrower. Borrowers who do not have collateral are considered high risk. But this does vary from lender to lender. These terms of what the loan can be used for will be stipulated in the contract you will need to sign when you are approved for the loan. If you are going to use a loan for something other than its initial purpose be aware of the repercussions. These consequences usually include things like having to give back the loan money or if you have spent it you will have to pay it back straight away as well as facing penalty charges. Fees are also applied that resulted in your breaking the agreement that was written out in the contract’s terms and conditions. The lender could even take legal action against you, such as filing a law suit and other related options, which in the end will cost you even more money. You will need to pay your lawyers fees and possibly the lenders lawyer as well, not to mention this will also take up a lot of your time.

To make matters even worse was if you applied for a loan and used it for something other than what you told the lender you were going to use it for, is found to be lying on the application form. Lying about information like your income and assets so you could increase your chances of getting the loan in the first place will only lead you into legal trouble. When you are caught doing this, you could be charged and prosecuted with several counts of fraud as well as other charges. You will also face having a criminal record as well as the possibility of receiving fines, community service, jail and the ruination of your credit record. The lender can also take other legal actions against you.

If you are in need of a loan you are much better off applying for a personal loan. These loans are available through any bank for almost any amount. With a personal loan you have the pleasure and ease of being able to do anything that you please with it. You can buy that stereo you’ve always wanted, a big screen television, a fast car, pay your over due bills, go on a fantastic holiday, move to a new house or practically anything you want, without being restricted and it is a completely legal and up front. No need to lie when applying for a personal loan. Sometimes personal loans can come with higher interest rates since there is a degree of risk involved, but you have the freedom and flexibility to shop around for such things such as lower interest rates. Personal loans usually have a lot more flexibility in their repayment options.

When you really look at it, is it worth putting your clean credit record at risk or even being denied the chance to apply for another loan in the future by lying about what you are using the loan money for? Remember there are plenty of other loan options available that you can apply for and use in absolutely any way you’d like and for anything you want. Do the right thing and tell the truth about what you are going to use your loan money for. In the end, a few extra dollars for the higher interest rate will out weigh any court matters.

The Jones’ family found their dream home and moved into it with all of the excitement and enthusiasm of a kid on Christmas morning. After a long and hectic day of unpacking, they collapsed into bed anticipating a good night’s rest. Unfortunately, they were shocked and dismayed when they began to hear the very obvious noise of trucks roaring along the inter-state highway situated less than a half mile to the rear of their home. Too late!

This unfortunate situation exemplifies the need to focus on location when contemplating the purchase of a home. A ten million dollar mansion isn’t worth a dime if it’s sitting next to a toxic waste dump. This example is far-fetched and outrageous, but it makes the point that finding the right location is certainly as important as finding the right house.

How do you investigate a potential neighborhood? There are a number of factors and issues to be considered in your evaluation. Some of them can be covered merely through visual observation; others will have to be explored with the assistance of community and government organizations.

One of your first and most significant concerns should be the crime rate. If every other house on the block is being burglarized every other month, you might want to look elsewhere. Talk to a spokesperson of the local law enforcement agency. Ask for a listing of their monthly crime stats and a copy of their year ending report. When talking to the spokesperson about crime rates, ask about their response times in your area. If it’s over five minutes, ask why. If the community has a neighborhood watch group or a neighborhood citizens’ security patrol, attend one of their meetings or speak with their group representatives.

How far is your new neighborhood from your place of employment? How far is too far? Bottom line: check the driving time and traffic patterns, both coming and going, by driving the route you’ll take. Are there any activities or facilities in the area that will make the trip more unpleasant or time consuming on specific days of the week? As an example, is there a bridge that backs up on Friday afternoons as people rush to their weekend retreats?

If you have children, or anticipate having them, you’ll want to check out the schools in the area. Visit the schools and talk to the Principals or school counselors. Ask about class sizes, bus service, curriculum and even school menus. If your child is a gifted student, you’ll want to inquire about accelerated courses. If your child needs special Ed opportunities, ask about them. Knowing about your child’s school is one of your primary responsibilities as a parent.

This may sound a bit picky, but you should visit and evaluate your local markets, shops and restaurants. Do they sell quality products? Is there a convenient place to purchase daily necessities such as milk, luncheon items, coffee, etc.? Do the local restaurants suit your taste? The answers to these questions may not factor substantially into your moving decision, but they are part of the equation and should at least be recognized and considered.

Availability of community services should not be overlooked. Is there a good hospital in the immediate vicinity? Do they have an emergency room? How about parks and a library?

You should visit the neighborhood at various times of the day and night to check for sounds, smells, heavy traffic and the presence of any activities that you might find offensive as a resident. Sometimes the complexion of a neighborhood changes at night. Drive around after dark and look for the presence of undesirables lounging about in public places. Try to get a sense and feeling of the neighborhood.

Finally, you will want to find out if the community has a community association. If so, visit the association and ask about membership dues, restrictions and covenants. If the representative is forthcoming, ask if there are any problems in the area that you as a prospective new resident should consider.

You are about to make one of the biggest financial decisions of your life. Don’t be timid. Ask questions, make notes and weigh all the pro’s and con’s before deciding.

You as the buyer or seller will have to appear at a meeting in which all of the final legal details will be handled, this is known as the closing. Others in attendance are the realtor, lender and a closing agent. The meeting usually occurs either at an agent’s office, or at a lending institution such as a bank or mortgage company. The main emphasis is to review all of the paper work, and to sign the different forms for financing, and to transfer title to the new owner. For the buyer and seller knowing what to expect can ease concerns on the process of closing.

Typically the buyer will have a more of a role to play in the process of closing on a house. However, the seller will have an important role to play too. Usually a review of the settlement sheet is presented first for both to sign and agree upon. You will need to be sure about the terms and agreements before you sign. Next the buyer will be required to show proofs of required mortgage insurance, and that all necessary inspections have been completed according to the guidelines of the contract. All parties must be in complete agreement over terms and sign the documents. Once this phase is completed both parties will present a certified check for the entire amount of the closing costs. The lender will present the funds paid to the closing agent, also if there are any funds due they will be submitted at that time to the lending agent.

Depending on the requirements that you agreed to as a buyer, for example your bank or mortgage company may have stipulated that any you will need to set up an escrow account to pay your property taxes, or may be your designated home insurance provider out of this account, this will be efficiently handled at the closing meeting for your new home. Other issues such as the recording of the deed will be discussed. Don’t be surprised if your informed that you don’t have legal claim to the property until it is officially recorded at your local courthouse. It is to be understood that you may not move in until you have legal ownership of a clear title, and this process can take from a few days to over a week. This is why disbursement of funds to anyone involved in the transaction will not be paid until the deed recording is completed.

If you’re the buyer you will need to know what forms you will be required to sign. Take a few moments and write down a check list, and bring along copies of any paper work that you have been required to sign or review. An important document known as the Truth in Lending statement will contain vast amounts of financial information for the buyer. This statement will contain information such as your interest rate for the mortgage, amount of the cash financed, and your monthly payment schedules along with the total amount paid based on the length of your loan. Detailed information will be found in other paper work for the buyer too. The mortgage note and other assigned specifications will spell out in specifics terms such as how and where the note is to be paid, and the institutions right to reclaim their rights to the property. This legal documentation will also explain that you’re to meet other specific requirements, such as paying any necessary insurances and taxes yearly, that is of course if you are allowed to pay this independently, and is not part of an escrow account.

The value and importance of a good realtor is quickly appreciated in the closing meeting. Many of the processes involved are readily explained by a caring and competent professional before the closing ever takes place. Make sure though that you do your part by taking the time to ask any questions that you have with your realtor, and studying if necessary your part of the process, whether you’re the buyer or seller. Home buying and selling can be a pleasant experience for all of those involved without a lot of hassle and grief. Just make sure you approach it with the right attitude and guidance.

Real estate law: Not for you?

Real estate is indeed one of the safest investments and a lot of people use real estate as an investment avenue. Real estate law is not the forte of real estate attorneys and real estate agents only. Every real estate investor should understand at least the basics of real estate law. In fact, a short course or a concise book on real estate law can sometimes be of great help (and is generally sufficient for understanding the basics of real estate law).

What you need to understand is the real estate law with respect to the legal procedures that you need to follow for ensuring a smooth transfer of title to the property you acquire/sell and other related procedures. You need to understand the fee structure (e.g. stamp duty, etc) that you need to take care of as per real estate law. You can also understand the classification of properties and how the basic real estate law applies to them. How the commercial and residential properties are treated differently by the real estate law. The tax laws with respect to real estate are one of the things that would be of most interest to you. So, your study on real estate law should also cover all the aspects related to taxes. How mortgages are treated in the perspective of real estate law is another thing that you should know about. Then again, the real estate law with respect to tenancy should also be well understood by people who wish to rent out their property.

However, you should not overdo that i.e. you should not start becoming hysterical about learning real estate law (lest you end up wasting a lot of time in trying to learn everything about real estate law and be left with no time to evaluate your real estate investment). Leave the intricacies of real estate law with the real estate attorneys (and to some extent real estate brokers who too are taught real estate law as part of their course for obtaining broker license).

Understanding the various legal terms referred to in real estate laws can help you in not only enhancing your understanding of real estate but also help in making your conversations with real estate attorneys/agents really fruitful. You should also note that though some of the basics remain the same, the real estate laws vary across various states. Also, real estate laws (especially the tax related real estate laws) can undergo a change over a period of time, so you need to keep a tab on such changes. Any big changes will anyhow appear prominently in news and you will get to know of them anyhow.
So knowing a little bit of real estate law can really be helpful (and is, in fact, essential).

Buying a home is a significant investment. A title insurance policy helps you protect that investment against potential losses that may occur after your house deal closes and you discover that someone else has an ownership claim to the property.

It may seem unlikely that such a scenario could play out, but it is a surprisingly common occurrence – frequent enough to make purchasing a title insurance policy a good idea to safeguard your investment.

When you buy a home, your lawyer or legal representative will conduct a title search (also called a title examination) to determine ownership of the property in question. A title search involves collecting and examining, in detail, all of the public records that involve the title to the property you are purchasing. The search may include past deeds, wills, trusts or other liens against the property to ensure that it has passed properly from owner to owner. The person conducting the search will also attempt to confirm that all previous mortgages and judgements involving the property have been fully paid.

Most times, your title search will come back clear. On occasion, however, a ‘cloud’ or ‘defect’ such as a missing signature will be detected, and while the defect is likely the result of an administrative error, it should be cleared before your deal is completed. A thorough title search should also reveal nuisance issues such as easements that may affect your interest in purchasing the property. Easements or right of ways may not present an immediate problem, but could adversely affect the property in the future.

Title searches are helpful in identifying any potential title-related issues relating to your property, but mistakes happen (in the public records themselves, as opposed to just mistakes on the part of your examiner), and you may find yourself involved in a legal battle in the future if a title conflict does come to light after the close of your house deal. That’s where title insurance comes into play; if you have a title insurance policy, your legal fees will be paid if you are forced to go to court, and if you lose the property as a result of a title dispute, you will be reimbursed up to the limit of your policy.

Similar to other types of insurance, title insurance policies do have certain exclusions, so it is important to clarify what your policy covers and what it does not. Some title insurance policies, for example, do not cover, or have limited coverage of problems related to easements, liens or mineral rights. Shop around if you want greater coverage and are willing to pay extra for it. No matter which policy you purchase, defects that occurred after you bought the property are not covered by title insurance.

Now that you have a better idea of what title insurance is and how it is used, do you need it? Maybe. If you pay cash for your property and do not require a mortgage, you may choose whether or not you want to purchase title insurance for your own protection. If, however, you are obtaining a mortgage to finance your house purchase your lender will likely insist on title insurance coverage to protect its own interests in the event of a title dispute. Your lender may also stipulate additional coverage to guard your portion of the home’s value. Policies vary by insurance carrier, but generally, a lender’s policy is for the amount of the mortgage and is payable to the lender in the event of a lost dispute while an owner’s policy covers the full cost of the property plus legal fees. An issue to consider when purchasing title insurance is whether your policy includes inflation riders that will increase the amount of your coverage as your property value rises. You may pay a premium for this service.

Home buyers are usually responsible for the cost of title insurance, but may defray the charge by including title coverage as a condition of sale or by having the seller’s policy adjusted and transferred to the buyer’s name. Additionally, some states may require the seller to pay some or all of the title insurance costs, which are typically paid in full as part of your property’s closing costs. Ask your legal representative to outline your responsibilities and the seller’s responsibilities.