5 Helpful Frequently Asked Questions From First Time Home Buyers

Frequently Questions From First Time Home Buyers:

1. Why do I  need a real estate attorney?

2. What is a mortgage?

3. How big of a down payment should I put down on a house?

4. What other costs should I expect?

5. What is the attorney’s role?

Are you a first time home buyer searching for your dream home? I’m sure you’re probably wondering…”how do we do this the right way?” Oftentimes, people who are looking to purchase their first home miss a lot of the important things needed to successfully go through the process. While we know the stress of buying a home can be a lot, our attorneys here at Apple Payne Law want to make sure it is an enjoyable experience for you! Here are 5 helpful frequently asked questions from first time home buyers we often get regarding purchasing a home for the first time. First, let’s start with the big question…

 

1. Why do I need a real estate attorney to close on a house? In the state of North Carolina it is required to have a real estate attorney present when handling the purchase and closing on a house. Your real estate attorney can essentially be seen as your “safety net” throughout this process. They’re there to help protect you! Your attorney will ensure that you are receiving the property clear of any legal circumstances that could prevent you from having full rights to the home, and that all the terms of the contract are met giving you complete ownership. In other words, your attorney makes sure there are no skeletons in the closet that could seriously hurt you when legally taking ownership of a home or property that may affect you long term.

 

2. What is a mortgage? A mortgage is an agreement between you and a lender (usually your bank) to repay the money you’ve borrowed from them plus interest. When you get a mortgage, the lender will give you a set amount of money to loan out in order for you to buy your home. When you receive this loan money, you are agreeing to pay back your lender/pay off your loan with interest that accumulates over a period of years. So, while you DO officially own the property, until your loan is paid off/lender completely paid back the lender has the right to ask the Court to take back or “foreclose” on your property if you don’t make your payments on time. So make sure that your mortgage is paid first!

 

3. How big of a down payment should I put down on a house? It is recommended that you put 20% down when buying a home but the average amount people usually put down is equal to about 6%, while the lowest you can put down is actually 3%, depending on your lender, credit score and the loan type! Typically, the lender wants 20% because it lowers their lending risk. If your credit score is on the lower end (below 700 or so), a larger down payment can increase your chances of being approved!

So, if you’re concerned about your budget for a down payment and realize it’s holding you back on your house hunting…don’t worry! There are ways to become a homeowner without a huge down payment. The other reason to go larger, if possible, is to avoid private mortgage insurance (called “PMI”). If you have under 20% down (aka equity) in the home, the lender will require PMI, which protects the lender in case of potential foreclosure. Unfortunately for the buyer, the cost of PMI is added to your monthly payment due to the lender. Once you have at least 20% equity in the home, you can request the PMI to be taken off of your monthly payment (unless you fronted the PMI costs at closing).

 

4. What other costs should I expect? Other than the down payment toward your new home, you should be aware of the extra expenses that come along with purchasing your first house, such as appraisals, inspections, closing and loan costs. Closing costs are the fees paid at the closing of a real estate transaction. The total closing costs depend on the price and location of your home, but as a starting point, you can expect to spend between two and five percent of your mortgage loan in closing costs. Your loan costs (i.e. bank charges for handling the loan) are included in your closing costs  as well.

 

Title insurance is a way to protect yourself from financial loss and related legal expenses if there was to be a defect in title to your property that is covered by the policy. Title insurance differs from other types of insurance simply because it focuses on risk prevention, rather than risk assumption. You can generally expect to pay a few hundred to $2,000 on title insurance, while larger loan amounts, smaller down payments, and lower credit scores can all be a risk of increasing this amount as well.

 

Home warranty is a contract that agrees to provide a homeowner with discounted repair and replacement services. Simply, it provides financial protection against disasters, theft, and accidents. Your home warranty costs depend on the size of your property, and how many appliances you’d like to cover in your home, and which applications. This range typically falls between $350-$600 a year to be protected.

 

5. What is the attorney’s role? The state of North Carolina requires a closing attorney in all real estate transactions, including cash closings. Your attorney will act as the “go between” for the lender, real estate agent, buyer, and seller (or seller’s attorney).

 

Your real estate attorney will begin by conducting a title search on the property you’re trying to purchase, which protects you from any hidden issues that you don’t want attached to you when taking ownership of the property! Such as: a possible second owner that the seller (or  real estate listing agent) may not know about, unpaid mortgages, lines of credit (home equity loans), or unpaid taxes; outstanding lawsuits, liens, or judgements on the property.

 

Once the title search is complete, your attorney will then submit a title opinion to obtain title insurance. There are two  kinds of title insurance: the lender policy (to make sure that if there are any issues later, the lender can still get the mortgage $$ back) and the owner policy (to protect the buyer’s ownership just in case). The lender’s title insurance is almost always required; they will not lend you the money without it. The owner’s policy is highly recommended – it is usually low cost and while you PROBABLY won’t need it, the peace of mind and protecting your new home is worth it.

 

The closing attorney wil also balance the closing disclosure (formerly called a “HUD Statement” a “HUD 1”, but basically a ledger showing where all the money at closing is going) to make sure all the right folks get paid, and more importantly get paid the correct amount!

 

Your real estate attorney will finally conduct the closing by reviewing lender documents to ensure they’re correct, make sure all documents are executed properly, record the deed and/or deed of trust, hold and distribute money (i.e. property taxes, homeowner’s insurance, commission, proceeds, attorneys fees, etc.).

 

How a client and agent can help their real estate attorney: 

So after learning all of that, you may be wondering…”How can I as a first time home buyer make my real estate attorney’s life easier”? The simple answer is, be responsive! There is a lot of information attorneys typically need from both the buyer and the seller to complete a closing. Additionally, receiving this information and submitting it to all of the appropriate places (such as title insurance, lender, etc.) is time sensitive. As always, ask questions! Whether it is your first time buying a house or you bought one over ten years ago, it’s perfectly fine to have questions. This is one of the biggest decisions and purchases you can make and you probably have questions about it ranging from the timeline, to costs and fees, to procedure.

 

What can agents do to help? Once again, be responsive! Agents are sometimes the only line of communication we have, especially at the beginning when both the buyer and seller have agents – the buyer and seller contact information is not usually listed on the offer to purchase or contract. Just like real estate agents want the closing attorney to be responsive, we need the real estate agents to be responsive to us as well to help make sure everything closes on time (or as close to on time as is possible within our control).

Are you looking to be a first time home buyer? Schedule a FREE consultation today or give us a call to speak with one of our real estate staff to answer any additional questions you may have! Set the legal work aside for us to handle, Apple Payne Law is here to help you fulfil your dream…the dream of becoming a homeowner! We hope these answers to the frequently asked questions from our first time home buyers was helpful, and if you’d like to read more you can find our previous blog posts on our website!

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Learn more About Ron Payne, 2021 Super Lawyers Award Winner in Family Law

We all know it’s important to work with attorneys who you connect with and take pride in their work. Some important attributes to consider are compassion, honesty, and dedication. Lawyers who do exhibit these qualities deserve to be recognized for their achievements. Here at Apple Payne Law, our attorneys are known in Kernersville and surrounding communities for having these traits and more. That’s why we wanted to take a moment to highlight one of our very own attorneys. He’s trustworthy, committed, and dedicated – Mr. Ron Payne! Mr. Payne has once again been designated as a North Carolina Rising Star, Super Lawyer Award Winner in 2020 for Family Law! This is Mr. Payne’s fifth year in a row that he has achieved the award. It’s an achievement and honor only given to a handful of lawyers throughout the country, and it’s a tremendous accomplishment for any lawyer. Our team here at Apple Payne Law are proud of Ron and his performance! To learn more about the Rising Stars Super Lawyer Award, keep reading.

 


 

What are the Super Lawyer Awards?

 

These awards are given to selected attorneys who are recognized through peer recognition and professional achievements over the course of the year. This group of individuals are praised for their superior service, quality of work, and customer satisfaction. The Super Lawyers list is shared through the Super Lawyer digital and printed magazine, and are featured in select magazines throughout every state.

 

Once this award has been given, the respective attorney will make the Super Lawyer list for their state, and keep this recognition for the year. They can also be found online, through the Super Lawyer database.

 

 

What does it mean to be a Rising Star?

 

A rising star is someone who has done excellent work within their practice but has also been practicing law for less than ten years. They are also selected by nominations and peer evaluations, same as other Super Lawyer nominees, and are known for their quality service.

 

You can view a complete Super Lawyer or Rising Star profile on the Super Lawyer site, just by searching their name, and see what additional achievements they have been recognized for. You’ll find Ron listed among them as well!

 

 

Our very own Ron Payne is a Rising Star 2021 Recipient

 

As a North Carolina Rising Star 2021 recipient, Ron Payne has been recognized for his achievements in family law by the Super Lawyer committee. Ron has provided outstanding service over the last year and can be found on the Super Lawyer directory. In addition to practicing family law, Ron does estate planning. Whether you need help with legal adoptions, a last will and testament, or naming a power of attorney, Ron is able to assist you with all these important legal proceedings.

 

 

Learn more about Apple Payne Law

 

At the core, Apple Payne Law focuses their attention on family law and estate planning and can assist you in services such as:

 

If you need legal advice on any of these matters, the attorneys at Apple Payne Law are very knowledgeable in their respective fields. You can count on honest counsel from our team – all it takes is scheduling an initial consultation, and we can get started assisting you as soon as possible.

 

 

Legal advice should come from lawyers you can trust. As a 4-time Rising Star recipient in Family Law, Ron and the rest of the Apple Payne team are here and ready to offer their services to anyone in Kernersville, Winston-Salem, Greensboro, or the surrounding Piedmont Triad. To get started, schedule an initial consultation today.

 

 

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How to Find an Estate Planning Lawyer

An estate plan is one of the most important legal documents you will create in your lifetime. Estate planning is for everyone. It doesn’t matter if you are single, married, divorced, remarried, have kids, adopted kids, or don’t have any kids. An estate plan outlines in detail your wishes in various areas of your life, including how you are to be cared for if you become incapacitated, where your assets are to go upon your death, and who will be named guardians of your minor children.

Failing to create an estate plan is a recipe for disaster. That’s why the team at Apple Payne Law has built this list for finding an estate planning lawyer. You shouldn’t just work with the first lawyer you find online. It’s important to obtain recommendations from family members, read reviews, and have consultations with a few lawyers before making your decision. An estate plan is too important to put in just anyone’s hands.

Ask for a Personal Referral

One of the most effective ways to find an estate planning lawyer is to ask for a personal referral. Talk to your family members and friends who have already create their estate plan. Find out who they used. Ask them the following questions:

  • Were you happy with the lawyer?
  • What was their fee?
  • What was their turnaround time?
  • Did they answer your questions?
  • Did they return phone calls and emails in a timely manner?
  • Do they offer remote consultations?
  • Would they recommend this attorney to a friend or family member?
  • What was it they didn’t like about the attorney?

 

A personal recommendation speaks volumes about the ability of the attorney to provide superior service to his or her clients.

 

Talk to Your Specialists

You more than likely work with an accountant and a financial planner. Both of these specialists should have contacts in the legal field, especially in the estate planning practice area. Ask each one for a few recommendations. Estate planning attorneys work with accountants and financial planners all the time. Find one who has a strong working relationship with your specialists or ones they recommend working with even if they haven’t worked with them in a while.

 

Talk to An Attorney from Another Practice Area

Have you worked with an attorney in the personal injury, real estate, or business law practice areas? If so, there’s nothing wrong with asking one of these attorneys for a referral to an estate planning attorney. They will undoubtedly have connections they can refer to you, some of whom might work in their firm.

 

Explore Your State or Local Bar Association

It might not be a bad idea to explore your state or local bar association when looking for an estate planning lawyer. There might even be a referral service set up with the association. Either way, the bar association will be able to provide you with a directory of all registered and licensed estate planning attorneys in your area.

 

Schedule Multiple Consultations

Again, it’s important that you meet with at least a few of the estate planning attorneys who have been recommended. This is done via a consultation, which almost always is free. You should come prepared with a list of questions. Ask each attorney the same set of questions so you can compare the answers. The list of questions should include the following:

  • How long have you been practicing estate planning law?
  • Where did you earn your degree?
  • How will communication with me be handled?
  • How can I best contact you?
  • Will a paralegal be my point of contact or will it be you?
  • Will updates about my estate plan automatically be sent to me or should I inquire?
  • How do you handle billing and what is your rate?
  • Is there anything that your rate does not cover?

 

Review Your Notes and Recommendations

After you have attended a consultation with at least three different estate planning lawyers, it’s time to whittle the list down to your final choice. You should review the notes you took at each consultation carefully and compare them between the attorneys. Compare the attorneys based on the following information:

  • Their ratings on various websites
  • The testimonials posted on their own websites
  • Their rates
  • Their communication methods
  • If you will be in direct contact with the attorney or a paralegal
  • Any other pertinent information

 

You should balance your decision with the personal recommendations you received. You should not base the decision solely on the notes you took at the consultations. Personal recommendations should be highly rated when coming to a decision, especially if multiple people you trust recommended the same lawyer for estate planning.

 

Move Forward with Your Selection

Now it’s time to move forward with the attorney you selected to help you build an estate plan. Contact this attorney immediately to schedule an appointment. When you visit with the attorney, be sure you have the following with you:

  • A list of your concerns and questions
  • An updated financial statement
  • The latest statements from your checking, savings, retirement, and investment accounts
  • The deed to your home and any other property you own
  • Any previous estate planning documents you have
  • Any martial or prenuptial agreements
  • Copies of life insurance policies, retirement plans, and annuities
  • Contact information for your financial planner, accountant, insurance broker, and other professionals whose services you use
  • Contact information for your physician and any other medical specialists you see
  • Contact information for family members and anyone whom you name as trustee, executor, guardian, or power of attorney
  • A preliminary list of anyone whom you wish to name in the positions mentioned above
  • A preliminary list of the goals you wish to meet when planning your estate
  • Contact information for any charities you donate to throughout the year

 

It is important that you are able to bring as much of this information as possible to your first estate planning meeting with the lawyer you have chosen. If not, you will be wasting your time. Collect all of these documents and phone numbers ahead of time. Your lawyer will need them for the estate plan and might even have to contact some of these people to ask questions or inform them of the positions they have been selected to hold based on your decisions.

Estate planning is not something that should be taken lightly. If you do not have an estate plan in place, now is the time to create one. Having a power of attorney, executor, trustee, and guardian in place for the inevitable or for if you become incapacitated will make the situation much easier on your family. Discuss your future with your family honestly. Let them know why they were chosen for a specific position and express your wishes to them before they hear them at the reading of your will.

 

 

It’s never too early to create an estate plan. You should at least have a Will in place the minute you graduate from college and go out on your own. You can build on the Will as you age and as you experience different milestones in your life. These milestones include getting married, having children, getting divorced, having grandchildren, and much more. Call the office of Apple Payne Law in Kernersville, North Carolina, to schedule a consultation with an estate planning lawyer.

 

 

 

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