Buyer Beware

Purchasing a new home can be a wonderful experience, but it can also put you on the radar for unwanted solicitations. All real estate transactions are a matter of public record and are easily obtainable through the County Clerk or County Tax Assessor’s office. By requesting a list of any newly registered homeowners, some businesses might obtain your name, address, and the name of your mortgage company and use this information in order to send you their own solicitations.

Most of these solicitations are going to be offering to perform services or functions for you that you can accomplish yourself for free.

Some of the solicitation types you might receive are:

1. “Help Filing Your Homestead Exemption”

   Forms are available online at the website for your County Appraisal District for you to request a Homestead Exemption on your property. The form for and filing of the exemption request are free and you can call your County Appraisal District at any time for help in filing or to obtain a copy of the form, should you not have access to internet.

2. “Certified Copies of Your Deed”

   You should receive the original, recorded Warranty Deed or Special Warranty Deed directly from the Title Company once it has been recorded and returned to your Escrow Officer. This is what some people mistakenly refer to as your “title” to your home. This document shows you own and have the right to use the property you have purchased. You should also receive copies of all the documents relating to your loan that were signed by you at closing from your Escrow Officer before you leave the title company. This will include a copy of your Deed of Trust which is the legal document relating to the mortgage you have with UFCU. Any copies you misplace or didn’t receive can be obtained directly from the title company or from UFCU. You can also obtain copies for a minimal fee at the County Clerk’s office, or print copies of anything that is recorded through the online website in most counties.

3. “Biweekly Program/Payment” Solicitations

   Throughout the life of your loan, you might receive solicitations to sign up for “biweekly” payments. While making extra payments in the form of principal payments is always in your best interest, biweekly payment programs might not be for you. Most mortgages are standardly amortized loans; which means your payment will have the same amount of interest taken out of your loan whether you make your payment on the 1st or the 10th of the month. Simple, or daily interest loans, are structured differently and interest amounts will change depending on the number of days between payments, as interest is calculated daily.

   These companies generally require a fee (sometimes the fee is up to one fourth of your mortgage payment; e.g. if your monthly payment is $800, you might pay up to $200 to set up a biweekly system with them) and then there will be a per payment charge of $3.50 or more per payment. For this amount they will deduct 26 payments per year from your account (not 24) and the payments will be held in a suspense account at your mortgage company until a full payment is received.

   The only benefit for these programs is you will be making the equivalent of one extra payment per year. The same result can be achieved by taking your normal monthly payment, dividing the amount by 12, and then adding this amount to your regular monthly payment as a principal payment every month. Every dollar you pay towards your principal results in less interest being taken out of your next monthly payment and you will pay off your loan years early if you do this from the beginning and continue through the life of the loan. A little bit of mathematics can save you a large set-up fee and up to $91.00 per year in additional fees for something you can easily do for yourself.

The bottom line is, if you receive any solicitations or offers for services after you have closed on your loan, please contact your mortgage company, County Clerk, or County Appraisal District directly and make sure it is in your best interest. We are happy to assist you in determining what exactly you do need and how best to accomplish your goals.