The Benefits of Refinancing Your Home — Strategically

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Throughout the years of your mortgage, you’ll likely ask the question more than once: Is now the right time to refinance? First, note that refinancing may be no easier than getting that existing loan. Moreover, from 2020 on, expect lenders to have stringent requirements for mortgage approvals.

The answer will depend, too, on varied factors specific to your own situation.

Here are a few reasons refinancing could make a lot of sense — or not.

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Selling Your House? Working From Home May Impact Buyer Preferences

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Appealing to work-from-home buyers can boost your home’s profile. How much? To get an idea of the value placed on the work-from-home economy today, note that Apple, in September 2020, introduced its holiday subscription sets of TV shows, games, news, music and home workouts — all designed to cater to the work-at-home set.

The office has shifted, and the work-from-home life is here to stay. With that in mind, let’s look at what work-from-home buyers are seeking in a home itself, and how a seller can use this knowledge advantageously.

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How to File a Mechanic’s Lien

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When businesses don’t get paid for working at someone’s home, their super power is the mechanic’s lien. Recorded in the county where the work is done, it attaches to the title of the home. The last thing a homeowner wants is a cloud on the title. Liens make a home hard to sell, to borrow money against, or to refinance until the lien is resolved. So, warning the client of an intent to record a lien usually has the desired effect: the client pays the bill.

Strong stuff! It’s said that Thomas Jefferson introduced the mechanic’s lien into U.S. legal practice, to encourage construction workers to build in the early days of the country. In those days, construction workers were called mechanics. Today, the instrument is interchangeably referred to as a mechanic’s lien or a construction lien.

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For Home Buyers and Sellers: How a Contract for Deed Works

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We’ve noticed, and maybe you have, too. Mortgage lenders have really been tightening their loan approval standards these days. Lenders are cautious because so many people are coping with layoffs, career changes, and volatile financial situations.

Some sellers are willing to help hopeful home buyers avoid the mortgage process, using the contract for deed. Often, these instruments are put to use when the seller has a family member or close friend who’d like to own, but has a non-traditional job or financial situation.

Also known as an installment sale agreement, a contract for deed is a home purchase — it’s just financed by the seller, not a financial institution. After the parties close on the agreement, the buyer lives in the house as the owner, and sends the seller monthly installments. The length of the loan and the installment amounts are negotiable. There might be no down payment, or a relatively modest one.

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The Property Survey: Do You Need One?

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Will you have a survey done before your coming real estate deal? Of course, a professional will be examining the title. But a title search does not include a survey. With a title search, the title company reviews the chain of title, up to the present ownership. It does not reveal specific physical details of the property.

Depending on the region of the country (and even the state) in which the home exists, the mortgage company might or might not require a survey. Nevertheless, either the seller or the buyer may want to hire a service to produce an up-to-date survey. Here, we make the case for having this done — so you can decide for yourself.

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Co-Owning Property With a Non-U.S. Citizen? Keep These Points in Mind

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Whether you plan to co-own property with a United States citizen or a non-U.S. citizen, the rules of the game aren’t too different. Noncitizens can inherit property. They may be named as beneficiaries on financial and insurance accounts, just as citizens may. And whether you own jointly with citizen or resident, you’ll each qualify for the current annual gift tax exclusion.

You’ll also qualify for the current estate tax exemption if you’re under the cap. Specifically, there is no estate tax on the wealth of people who pass away with (as of 2020) less than $11.58 million (twice that amount per couple). The non-U.S. citizen spouse can inherit up to the annual cap without owing federal estate tax. (This attractively high estate tax exemption could expire within the next few years.)

Now, those basics aside, here are a few special property ownership rules and tax provisions worthy of note. 

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Notaries Had Enough Trouble in 2020. Then Indiana Botched a Notary Law Update.

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What happened July 1, 2020, when the Indiana Senate tweaked Indiana Code § 32-21-2-3?

Previously, that provision of Indiana law said any conveyance, mortgage or other document to be recorded must simply have the signer acknowledge the document with a notary. Or the document could be proved with a notary and an additional witness. The key term is or — you needed either one or the other. Now, that section of the code has the word and instead of or.

Little words, big problems.

It was “an unintentional drafting error,” wrote Bill Anderson, Government Affairs VP for the National Notary Association, “with potential consequences for notaries in every U.S. jurisdiction.”

So, two different notarizations — an acknowledgement and a proof with a witness — must accompany any paper or electronic instrument submitted for recording. You can see samples of both notarial formats here.

As Indiana senators will henceforth never forget, the tiniest word change in a law’s language matters. The statute is slated to be amended and corrected when Indiana’s General Assembly reconvenes in 2021.


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When You Least Expect It… What You Need Know About Unrecorded Real Estate Liens

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For many buyers, the home shopping experience involves gazing wistfully at hardwood floors, kitchen countertops, new appliances, and the sunny views from the windows over the garden. As the purchase decision gets closer, the focus turns to the AC efficiency and the state of the roofing, electric outlets, vents, and ducts. Even then, an unknown lien on the title might be the furthest thing from a buyer’s mind.

Liens represent debts that must be resolved before the home can be sold. A mortgage lien, for example, represents a buyer’s obligation to repay the lender.

Before the title can be conveyed to a new owner, a title search will look back over the chain of title to find easements, covenants and restrictions in the records. If a preliminary title report comes back clean, it means nothing substantial was unearthed in the records. Typically, then, the buyer can then access financing, and the parties may proceed with the deal.

But what about unrecorded liens? No one likes surprises that could delay closing. Potentially even more problematic are liens that escape the title company’s attention entirely, only to be discovered after the new owner has lived in the home for some time.

To avert these problems, it helps to know the basics of unrecorded liens.

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LGBT+ and Real Estate Ownership

Navigating Mortgages, Titles and Deeds

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Co-buying a home as a couple signifies a serious commitment on multiple levels. If you have spoken with your real estate lawyer and financial expert, and decided to buy property together as a couple, congrats! You’ll want to make informed decisions about financing and titling your property together. You’ll be forging an estate plan as you go — because the way ownership is vested on the title tells the world what should happen with your property ownership even beyond your life.

It’s good to know that the language of the chain of title can co-exist with respect for the homeowners’ sexual identity. Even so, certain things will be on LGBTIQ home buyers’ radar. Here, we outline some frequently noted issues, to help orient your conversations with your financial and legal advisers, and your mortgage and title professionals.

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