Understanding OWNER’S Title Insurance in Georgia

What is Owner’s Title Insurance? Why isn’t it covered in homeowners insurance? 

When you’re going through the process of buying a house, the list of closing costs can be overwhelming. As a licensed Georgia real estate attorney, we come across questions about these costs all the time. Questions that come up the most tend to be questions about Title Insurance. 

What is Owner’s Title Insurance? 

Owner’s Title Insurance is insurance that protects you, the homeowner, from issues that could pop up and compromise the title of the property. It protects you in case the person who sold you the home had back taxes owed, or there’s a conflict in the Will. Owner’s Title Insurance protects you against financial losses in these cases. 

Owner’s Title Insurance vs. Homeowners Insurance?

Homeowner’s insurance protects you financially in case something physical happens to the home. For example floods, tornados, hurricanes, trees falling on the roof. Those are the sort of things typically covered by your Homeowner’s insurance. Owner’s Title Insurance covers you against financial damages in case there is an issue with the title of your home. 

Is Owner’s Title Insurance Required? 

Technically, no. In Georgia, Owner’s Title Insurance is not a requirement in order to get your mortgage. It’s still strongly recommended. 

How do I find Owner’s Title Insurance? 

One of the many services we provide at Frank B. Pallotta Law is Title Examination and Title Insurance. Because Owner’s Title Insurance is optional, be sure to take a look around and pick a plan that works within your budget and what kind of coverage you’re looking for. 

How much does Owner’s Title Insurance Cost? 

When you’re buying a house in Georgia, Owner’s Title Insurance can cost from as low as $400 to as high as over $1000. A title insurance premium rate calculator is available here or a quote can be obtained by calling our office at 770-924-1400.

What will my Owner’s Title Insurance cover? 

There are a wide variety of things that can come up and end up costing you money after you’ve purchased a home. When you’re reviewing your policy, these are the things you’ll want to make are on it: 

  • A previous mortgage on the home that was not satisfied or settled. 
  • Unprocessed or dissatisfied foreclosures and bankruptcies. 
  • Property taxes or inheritances taxes that were not paid
  • Liens against the home from previously unpaid contractors, real estate taxes, or utility companies. 
  • Ownership issues, either from conflicting wills, missing heirs, or divorce issues 

Owner’s title insurance can cover all of these situations, typically up to the amount you paid for your home plus the legal fees associated with resolving them. 

Ideally none of these things will come up and you will have a properly Clean Title. But life is messy, and that’s why insurance exists. 

What do I do if I have any more questions?

Give us a call! At Frank B. Pallotta Law we have 20 years of experience helping our clients in Georgia navigate the real estate closing process. Reach out to us with your questions. We’re here to help. 

Understanding LENDER Title Insurance in Georgia

Whether you go on your own or with the help of a real estate agent, buying a house brings with it the list of “dreaded” closing costs. Buying a house is one of the biggest, if not the biggest, investment you’ll make in your lifetime. By the time you’re looking at the closing costs, it can feel overwhelming. 

Here at Frank B. Pallotta Law, we get a lot of questions about the closing costs. Some come up more often than others, especially about Lender’s Title Insurance. 

Lender’s Title Insurance

There are two types of title insurances that will show up as you close on your new home: Lender’s and Owner’s title insurance. Lender’s title insurance is an insurance fee you pay on behalf of your mortgage lender. It protects their interests in the event that an issue arises with the Title of your new home. 

Who does Lender’s Title Insurance cover?

Lender’s title insurance covers your mortgage holder; not you, the owner. It serves to protect the mortgage holder from any financial damages that could occur from a “cloudy” or “dirty” title being sold to you. 

If the Title on the home is not clear, it can cause quite a few problems in the purchasing process. And, for the most part, resolving the title issues will fall on the seller and should be sorted out before you get to the closing portion. The insurance is just in case something goes wrong…

Common problems include: 

  • Conflicting wills, missing heirs
  • Separations and divorces that complicate ownership of the home
  • Liens/Levies from taxes, unpaid utilities, etc.
  • Poor surveying of the property lines

All of these problems would ideally be resolved before ownership of the home is transferred to you, or at least before you get a mortgage on that Title. 

What Title Insurance is for the Owner? 

Title insurance for the owner is called Owner’s Title Insurance. It’s an entirely separate type of insurance and will be a different item on the closing list. Unlike Lender’s title insurance, Owner’s is technically optional, but still highly recommended to have.

What happens if you don’t get Lender’s Title Insurance? 

Most often trying to avoid getting lender’s title insurance will simply result in your mortgage being denied, cancelled, or rejected outright. 

How do I get Lender’s Title Insurance?

Usually your mortgage holder will have a preferred insurance provider. One of the many services we provide at Frank B. Pallotta Law is Title Examination and Title Insurance. How much lender’s title insurance will cost will vary depending on the policy your mortgage lender is requiring and the value of the home. A title insurance premium rate calculator is available here or a quote can be obtained by calling our office at 770-924-1400.

What if I have any more questions?

Give us a call! Frank B. Pallotta Law is a licensed Real Estate Lawyer in Cherokee County, Georgia with 20 years of experience helping our clients navigate the closing process. Reach out to us with your questions. We’re here to help!

Should You Refinance Your Home?

As mortgage rates hit a historical low, you may be wondering whether or not you should begin the process of refinancing your mortgage. At Frank B. Pallotta Law Firm, we are here to walk you through your options and guide you in the best way we can. 

Benefits of Refinancing

There are multiple advantages to refinancing your mortgage loan. If mortgage rates are exceptionally low to the point that it would lower your monthly mortgage payment, this would be a great opportunity for you to move forward with the refinancing process. 

Another great reason to refinance your mortgage is to shorten your loan term from a 30 year loan to a 15 year mortgage loan. This could seriously accelerate your goals to having your home completely paid off. 

If you have an adjustable rate mortgage (ARM), refinancing your mortgage could give you more predictable payments with a fixed-rate loan to lock in your rate for the remainder of the loan. 

You Should Refinance If…

If you’re facing a cash flow issue then a cash-out refinance issue may be the best plan for you. You can read more about this option in our latest blog post. Since mortgage loans usually have lower interest rates and are tax deductible, this might be a good option for you.

If you have reached 20% equity in your home then it is time to refinance to eliminate the lender-paid mortgage insurance (PMI) premium that is built into your loan.

Lastly, if you need to remove a person from your mortgage usually due to a divorce or to remove a co-signer no longer needed, the only way to accomplish this is by refinancing. 

What To Expect When Refinancing

Before you begin the refinancing process, there are a few things you’ll want to check first. Make sure you have at least 20% equity in your home. If you will still have to pay PMI even after you refinance for a lower interest rate, you will want to crunch the numbers to see if refinancing even makes sense for you. 

You’ll also want to check to make sure your credit score is at least 760 and your debt-to-income ratio is 36% or less. This will give you the best chances to get the lowest interest rate. 

Last but not least, be sure to calculate the break-even point and how refinancing will affect your taxes.

Ready to Call Your Real Estate Attorney?

If you think refinancing is the best next step for you or if you have more questions about what your options are, we are here to help you. Give us a call today and let our expert team guide you. With videoconferencing still in effect under COVID-19 Executive Orders, Frank B. Pallotta Law can make your refinance closing even easier.

What You Should Know About Home EQUITY

We can set all the right plans for our future but no one could predict things like a global pandemic, an economic recession or a natural disaster. When those things hit, it’s important to know what options you have to get your hands on some cash if you need it.

If you need a cash-out refinance or a home equity line of credit, there are some important things to know about the process and how that will impact you long term. 

What is a Cash-Out Refinance?

When you have a cash-out refinance, you are borrowing against your home equity to obtain funds. With this type of refinancing, you receive your check at closing and the amount of this loan is then added onto the mortgage that you owe. Since mortgage rates tend to be lower than other types of debt and are tax-deductible, this route can be a very cost-efficient way to borrow.

Doing this results in a new mortgage loan which may have different terms than your original loan. These terms could range from a different type of loan, a different interest rate or a longer or shorter time period for paying off your loan.

Before your check is cut, proceeds are first used to pay off your existing mortgage and any closing costs or prepaid items. You can expect similar closing costs to your original mortgage at your cash-out refinance closing.

What is a Home Equity Line of Credit?

Home equity line of credit (HELOC) is taken out in addition to your existing mortgage. Since this is considered a 2nd mortgage, it will have its own term and repayment schedule separate from your 1st mortgage. However, if your house is already paid for and fully owned by you (no mortgage), some lenders allow you to open a home equity line of credit and the HELOC will be your 1st and only mortgage.

With a HELOC, you can withdraw from your available line of credit as needed during your draw period, which is usually about 10 years. During this period, you’ll make monthly payments with principal and interest. After the draw period ends, the repayment period begins with 20 years to repay the outstanding balance.

HELOC usually has no (or relatively small) closing costs.

Ready to Call Your Real Estate Attorney?

If you’re in need of taking any equity out on your home, the best next step is to call Frank B. Pallotta Law today. Our expert team will guide you through your current situation and make you feel confident in choosing the right decision between a cash-out refinance or a home equity line of credit. And with videoconferencing still in effect under COVID-19 Executive Orders, Frank B. Pallotta Law can make your refinance closing process entirely stress free. 

Why Home Buyers Should Hire a Real Estate Agent

When searching for a new home in Georgia, you may not be aware that you could technically do it on your own. Georgians are not legally required to hire a real estate agent to assist in finding and purchasing a home. However, if you ask anyone at Frank B. Pallotta Law, the first thing we’re going to recommend is to start interviewing realtors. 

Interviewing real estate agents may sound like a daunting task but, most of the time, all it takes is simply asking your friends and family if they know a good realtor and you’ll probably end up with a longer list than you anticipated. If that comes up with little to no results, we would be happy to provide recommendations of real estate agents in Cobb, Cherokee, Fulton and surrounding Metro Atlanta counties. 

Why Hire a Professional?

A highly skilled real estate agent will help you navigate the real estate industry. They will have a team in place to guide you through one of the largest financial investments of your life. 

To make sure you know who you’re going into business with, start by researching online, ask about everyone on their “team” and learn what techniques they use to get their buyers on the winning end of every purchase. 

One question that is usually overlooked is who they use as their closing attorney. The most important phase of purchasing real estate is the moment the legally binding contracts are signed so it’s worth researching the real estate lawyer who will be processing the transaction.

Remember you are the CEO of your home search! Everyone you hire to guide you through the process, works for you.

Benefits to Hiring a Real Estate Agent

Money is the obvious benefit to hiring a real estate agent for both buyers and sellers. It’s understandable why so many people may initially think that having a middle man between buyer and seller is a waste of money but there are major financial benefits to realtors. Realtors know negotiation. As an unrepresented home buyer, you may miss huge opportunities just by simply not knowing what you can negotiate and what you cannot; what increases your home value and what does not. 

Money aside, real estate agents do a lot of the heavy lifting for you. We all know moving is a major transition and, unfortunately, the world doesn’t stop just because you are moving. You will be juggling more than usual, adding legal documents into the mix without a professional keeping you on track could get dicey. Important things that real estate agents are trained to handle might slip through the cracks. 

At the end of the day, your investment is too important to not hire a real estate agent. 

The final step in your home buying process is the closing. Behind every successful real estate agent is a highly skilled real estate attorney that takes over to process the transaction in a peaceful and fair manner after the selling price and terms have been established.

Georgia Law Requires a Real Estate Attorney 

Although Georgia does not require a realtor to buy or sell a home, all closings must be conducted by a licensed Georgia real estate attorney. Since we already know that closing on a home requires you to sign stacks of legal documents, you’re going to appreciate having that person in the room to help you understand what you’re signing and agreeing to. 

If you decide to buy your next home without a real estate agent, just note that you are still required to have a real estate attorney present at closing. Frank B. Pallotta Law would be happy to help you through that! Give us a call today and let our expert team guide you.

How COVID-19 is Temporarily Changing Georgia Real Estate Law

Every industry in the country has been affected in some way by the COVID-19 outbreak; real estate is no exception. If you’re planning on buying, selling or refinancing a home in Metro Atlanta during the coronavirus pandemic, we’ll take you through the State of Georgia Executive Orders that have been put into effect during this time to ensure your real estate closing appointment is not canceled due to the impact of COVID-19. 

As far as we know, these orders continue to remain in effect even though Governor Kemp has begun to reopen Georgia. As to when the orders will be lifted, we’re not sure, but all of us at Frank B. Pallotta Law are committed to keeping you informed on the real estate laws in Georgia as they continue to evolve.

Below we will reference Executive Order 04.09.20.01 from Governor Kemp. We will break down a few key points that we think are important to understand, specifically regarding “virtual” closings.

Virtual Real Estate Closing via Videoconference

The law that requires a notary, “an attorney licensed to practice law in Georgia or be operating under the supervision of an attorney licensed to practice law in Georgia”, to be present in person to notarize the signing of a legal document has been temporarily suspended. The result is that all the parties to the transaction do not need to gather in one room at the same time to complete the closing.

Remote online authorization has been put into effect using real-time audio visual communication technology (“AVCT”) meaning your closing attorney (notary) can be present via videoconference (i.e. Zoom, MS Teams, Skype, etc.). Recording the AVCT session from beginning to end is required; just make sure everyone is aware when recording begins.

First and foremost, everyone involved in the closing appointment must be physically located in the state of Georgia during the videoconference. 

The signer must present their proper identification to the closing attorney. You may also have to verify your identity through a 6-digit verification code that will be text to the known signer’s phone number. This code will be included in the closing file. Your closing attorney will then witness all “wet” signatures during the real-time AVCT session.

When you first receive your closing package from Frank B. Pallotta Law, you will find a return FedEx envelope with a mailing label attached as well as a blue ink pen for the signing. During the same videoconference session, you will be required to put all of the signed documents into the FedEx envelope and seal it in-view of the attorney. Immediately after the session has ended, you will deliver the envelope via overnight delivery.  

At the end of the videoconference, it’s recommended by the General Best Practices Under Executive Order 04.09.20.01 to consider stating something along the lines of, “This [name of document] was notarized pursuant to Executive Order 04.09.20.01 using [insert technology name] as real-time audio visual communication technology.” Many lenders require such a document be included in the closing package.

Everything else you would normally bring to your real estate closing appointment remains the same. Make sure you have a strong internet connection and have communicated with your attorney about their own videoconference or AVTC process.

If you have more questions or concerns about real estate law in Georgia during the Coronavirus/COVID-19 global pandemic and how it might impact your attempt to buy, sell or refinance your home, Frank B. Pallotta Law is here to help! Give us a call today and let our expert team guide you.

You can find more information about the Executive Orders put into effect due to COVID-19 on the State Bar of Georgia’s website.

5 Tips for Home Buyers to Find the Best Interest Rate

When the time comes and you’re finally ready to buy a home in Woodstock or Roswell, topics like mortgage interest rates may feel overwhelming and start giving you cold feet. Take a breath. At Frank Pallota Law, we are here to help you navigate the convoluted real estate market in Metro Atlanta.

A high interest rate could be the one thing between you and your dream home. So we’re going to take you through a few things you can start TODAY to ensure you will get the best rate once the time comes to apply.

Because there are a few components that determine your rate, you can’t anticipate a certain rate by simply asking your neighbors even though their home is in the same area and, most likely, comparable in price. So spend less time asking around and more time doing these 5 things…

1. Have the Highest Credit Score Possible

Needing a high credit score to get the best interest rate seems like a given for obvious reasons, however, there are a few things you can do to get a leg up! Pay down your credit card balances as much as you can each month without closing them. The goal is to get into the habit of only spending as much as you’re bringing in each month without building any unnecessary debt. Having a history of responsible credit usage will work in your favor when applying for a mortgage rate.

2. Have a Large Down Payment at Closing

As you prepare to make your home purchase, you want to start saving as if you already have a mortgage payment. Put that extra money into a savings account to apply towards your down payment. The larger the down payment at closing, the better the interest rate!

3. Lower Your Debt to Income Ratio

When applying for a mortgage interest rate you typically want a debt-to-income ratio smaller than 36%, with 28% (or less) of that debt going towards your mortgage. To figure this out, simply take your total debt amount and divide it by your income. If your debt totals up to $1,000 per month and your monthly income equals $4,000, your DTI is $1,000 ÷ $4,000, or 25 percent.

4. Pay Bills ON TIME

A history of how you manage your credit plays a significant role in the outcome of your interest rate. With a high credit score, a large down payment and a reasonable debt-to-income ratio, the lender will see you as a trusted borrower thus approving you for a great interest rate.

5. Avoid Adding New Lines of Credit Until After Closing

Try holding off on opening any new lines of credit until after those closing documents are signed, sealed & delivered! Adding new lines of credit make it more difficult for the lender to get an accurate sense of how you manage your finances. The more predictable you are in regards to your financial behavior, the greater confidence the lender will have in your ability to pay your mortgage on time.

If you have more questions or concerns about locking in your interest rate before closing, we’re here to help! Give us a call today and let our expert team guide you through the process.

Selling Your Home During the COVID-19 Outbreak

The term “new normal” has been used a lot lately when describing the rippling effect the Coronavirus, COVID-19 has had on our country and the world. But there is nothing normal about empty parks, clear roads or long-term school closures. And there is certainly nothing normal about selling your home when you literally can’t be anywhere else.

So far, the real estate market in Metro Atlanta remains open for business but gone are the days of running to Starbucks to pass the time while potential buyers tour your home.

All the medical experts will advise you that the safest route right now is to hold off on putting your home on the market. The rules of the past regarding the best times to sell your home, currently do not apply.

Life, however, isn’t always that simple and you may be facing circumstances that require you to move forward with your home selling process regardless of a shelter-in-place order from your city.

It’s time to get creative and flexible…

1. Create a Video Walk Through of Your Home

Clean the house, turn on all of the lights, organize closets, remove any clutter, pick up the rugs and take down any personal photos… then start filming! You’ll want to film in a “POV” (point of view) style using a DSLR camera or the newest smart phone you have. If you’re using a phone, remember to hold it horizontally while filming.

If your realtor doesn’t have the equipment or experience to do this for you, there are so many resources available online to help guide you through the process. Here’s a great example to get started: https://www.youtube.com/watch?v=GWtK4berZ2s

2. Teleconference Live Virtual Tours with Realtors & Buyers

Technology is playing the biggest role in keeping our economy afloat while we navigate through this current health crisis. Be open to giving potential buyers as many virtual home tours as they request until they feel ready to make an offer. At that time discuss with your realtor about a plan for physical home showings. Discuss a plan that allows sanitizing between appointments and precautions you would like the buyers to take when in the home; i.e. No shoes inside the house, no touch policy unless wearing gloves, only the essential people attend (no children) and if anyone is having symptoms of any kind, they do not attend.

3. Move Out, If Possible

Moving out before your home sells is not an option for everyone unless you have the financial means or a generous friend or family member that can offer you a place to stay without adding any extra risk to either one of you (i.e. someone in the house is a health worker and you are immune compromised or vice versa).

If you have a parent or a grandparent who could use the extra company, it’s a win-win for the both of you! What sounds better than spending some precious time with grandma while your empty house remains open for potential buyers?

Now once you move onto the closing process, we can take it from there! All of us at Frank Pallotta Law are working day and night with real estate agents in Cherokee and neighboring counties to ensure business continues for our clients. You can read more about the steps we are taking to keep your closing process moving forward while also maintaining everyone’s health and safety in our Message To Our Clients About COVID-19 and check out our Facebook for updates as things progress.

A Message to Our Clients about COVID-19

All of us at Frank Pallotta Law Firm want to take a moment to express our care and concern for every single one of our customers during this time of uncertainty surrounding the Coronavirus. Amidst school closures and overall daily life disruptions, we remain. We will continue to give our clients, friends and family the class A service that you have come to expect.

And while it’s not business as usual, it is still business and we are prepared to be flexible. Whether it’s changing an in-person meeting to a virtual one or a previously scheduled appointment to a different date, there’s nothing we can’t work out if we continue to communicate and help each other!

If all parties wish to continue with the closing process, we are prepared to deliver a clean and safe environment or adjust our closing locations and procedures as needed to maximize safety and comfort.

Before any customers and/or visitors come to the closing appointment, we ask that you go through a quick self assessment to monitor your symptoms, if any. Below are a few questions to ask yourself. If you answer ‘yes’ to any of them, please stay home and call your doctor. Access to our offices will be denied to anyone showing symptoms so we ask that you simply alert us in advance so we can make other arrangements.

1. Have you had close contact with or cared for someone diagnosed with COVID-19 within the last 14 days?

2. Have you returned from a cruise trip or any of the countries with travel restrictions from the CDC site in the last 14 days?

3. Have you experienced fever, cough, and/or shortness of breath in the last 14 days (symptoms can also include sore throat, respiratory illness, difficulty breathing)?

If you have any concerns, please give us a call and let us know how we can customize your closing experience.

Everyone at Frank Pallotta Law Firm will be doing their part to ensure your health and safety.

Be well,

Frank B. Pallotta, Attorney at Law

Best Months to Sell Your Home – RANKED

When to sell? When to buy? When to close? If you’re in the beginning phase of putting your home on the market, you’ve most likely already been told that it’s a seller’s market out there. Lucky for you, right?! Yes, as long as you have a wise real estate agent and a thorough closing attorney by your side.

Although the current real estate market is in favor of home-sellers, you still need to find the right season for homebuyers. We’ll take you through the top 4 months to put your home on the market based on the demographic that your newly listed home in the Metro Atlanta area will appeal to!

1. July 

There are so many factors that make July the #1 month to sell your home. The obvious one being BEAUTIFUL weather! What better way to showcase what your home has to offer on the inside and outside than a beautiful summer day? The second biggest reason July is the top month to sell your house is children are on summer break so your home buyers have more time and convenience to move, change school districts and get settled all before the kids start their next school year.

2. August

August is ranked 2nd best month to sell your home for many of the same reasons that make July the hottest month for homebuyers to be shopping the real estate market! Although listing your home in August could be a little riskier than July, due to the school year quickly approaching, but if you know you’re in a desired real estate location like Woodstock, GA, then you could set yourself up for the perfect bidding war. In this “seller’s market” we see a lot of homebuyer bidding wars that result in homes selling above list price. MAJOR WIN!

3. September

I know, we said to sell while the kids are out of school but September could still work for the young families on the search! Young growing families with children who are not yet in the school system will be searching while the weather is still nice. So if you have a home near a good school district, listing your home in September could motivate a lot of homebuyers to close before the holidays begin!

4. October

If your home is more the bachelor pad type or a retirement community, you don’t have to work around the general school schedule. However, you will want to get your home listed before the Holiday Season and FLU season begins! No one wants a lot of foot traffic in and out of their homes during this time (not to mention, where will you hide all of the presents?). List your home at the beginning of the fall season so you can have it sold before the Christmas trees are up and the germs are out!

If you’re ready to sell your home and need to be connected with a team that will know the in’s and out’s of the real estate market, we’re here to help! Give us a call today and let our expert team guide you through the process.