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More of Your Real Estate Questions Answered

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Question: My mortgage broker tells me there are many mortgage options. How do I know which to choose?

Answer: In recent years there has been an explosion in the number of mortgage types available. You must work with a lender or mortgage broker to determine the loan that is best for you; however, there are some general pointers to keep in mind. Loans come in many varieties: fixed rates (for 15, 30 or sometimes now 40 years) or adjustable, where the rate is often low for a few years then can change, going up or down. If you choose an adjustable loan, be sure that you can afford to make payments if the interest rate rises. One popular loan these days is the interest-only loan, where you defer payment of your principal for a set period of time. Do know, however, that when that period expires, you typically will pay both the regular and the deferred principal, upping your monthly fee substantially. Some lenders tell you you do not need to put up any money to get the loan; this may be true, but in my experience, underwriters sometimes balk at these deals, and your closing could be in jeopardy, which is why I often tell my seller clients to beware of buyers with little cash. Watch, too, for prepayment penalties in your prospective loan; if you have one and refinance your home (and in some cases, even sell it), you will have to pay a hefty surcharge to the lender. Finally, lenders vary widely in their fees and closing costs. Ask any lender for a “good faith estimate” before you sign on, which will document their expected charges.

Question: My wife and I moved to Florida and bought a home in November. I heard we are eligible for a Homestead exemption. How do we get one?

Answer: Homestead exemptions are a reduction in your property taxes for a primary residence. If you bought your home in 2013, you must file for an exemption by March 1, 2014. To qualify, you will need a Florida driver’s license with your new address, plus other documents. For details, check out the Broward County Property Appraiser’s office at bcpa.net. You can also call them at 954-357-6830, but it is often difficult to get through.

Question: I fell behind in my maintenance payments and found a person willing to lend me the money in a complex transaction. Now that person says he owns my house. I think I have been the victim of a scam.

Answer: There are a number of scams out there that homeowners must be wary of, or you can indeed lose your house even if you owe only a relatively small amount of money. In one scam, the “lender” agrees to pay your back maintenance and current monthly mortgage and fees for a certain time-period if you write the monthly check to them by a specific date each month. Miss that date even by a minute, and they take the title to your house that they are holding as collateral for the loan. If you are indeed behind on your monthly maintenance payments, try to work out a plan with your association or contact only a reputable lender.

PROBATE-YOUR HOME GETS SPECIAL TREATMENT

Homesteaded property enjoys a complicated and confusing status under Florida probate law.  It isn’t a probate asset, but to get its special non-estate status, it has to be certified as such by a probate judge.  In other words, the only way to keep it out of probate is to take it there first, unless the owner takes the necessary action while alive to avoid probate.

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Once someone decides to make an asset their homestead, the homestead laws can supersede what someone puts in his will. For instance if a person wants to leave his homestead to his girlfriend, that bequest won’t work if he’s still married at the time of his death. If a decedent is married, his spouse will have rights to the property until she dies, even if she is excluded from the will. She will have the right to choose between a life estate in the property and, in some cases, a 50 percent interest in the property even if she isn’t on the property’s title.  Furthermore, the decedent’s descendants also get rights to the homesteaded property.

 An example of how this probate/non-probate status of homestead property works is as follows:

 Ted Testator has a homestead condominium that he leaves to his 3 adult sons, Danny, Martin, and Joe in his will.  Ted dies and then Joe moves into the condo.  He doesn’t give his brothers access and won’t pay any of the carrying charges.  Even though a probate estate has been opened, the Probate Court won’t have the authority to hear this case.  A separate action must be brought in the Circuit Court, if the brothers want Joe out or want to sell the property.

 While the Probate Court cannot decide Joe’s fate, the Probate Judge can declare a property “homestead.”

While homesteaded properties are still subject to liens directly placed against them, like taxes and mortgages, they enjoy protection from other creditors.  As such, a homestead usually cannot be sold to meet other obligations of the estate. This protection can shelter the home’s equity for the heirs of the decedent, whoever they might be.

Ultimately, Florida’s laws dealing with homesteads and with transferring the property of deceased parties are extremely complicated and nuanced.  Given that most people do not have to deal with them on a regular basis, the help of an experienced estate attorney can be valuable.  An experienced attorney can manage these complexities and ensure that the family’s rights are protected throughout the process.