Georgetown Real Estate Law Blog

Student loan debt is a significant financial burden for many people in Delaware and across the country, and the weight of this debt can prevent people from taking steps like buying a home. Around the United States, there are over 44 million people who owe a total of $1.5 trillion in student debt. Of those, around 2.2 million people have a balance of $100,000 or higher, and $31 billion in student loan debt is currently 90 days or more overdue. Borrowers aged 40 and younger are particularly likely to carry student debt as they owe $850 billion of the outstanding student loan burden.

While student loan debt can be a major burden on anyone's balance sheet, it need not prevent people from taking the step of buying residential real estate. People can help bolster their chances of being approved for a mortgage despite their student loan debt by improving their FICO credit scores, for example. If people work to keep their credit scores at 750 or higher, they are considered to have excellent credit. This can play a major role in a successful mortgage approval.

When buying a home in Delaware, it is important to put in as many safeguards as possible. For instance, at an open house, buyers should ask for a seller's property disclosure. It will list everything that the seller knows is wrong with the home or was built without proper permission. As a general rule, a disclosure form that has nothing on it is a bigger warning sign than a form with several problems listed on it.

Buyers are generally allowed to break a purchase agreement if a homeowner doesn't disclose a problem that was known prior to the deal being struck. It may also be possible to put a series of contingencies into a purchase contract. If these contingencies cannot be met, the deal could be canceled by the buyer. Common contingencies include being able to get a mortgage or inspect the home.

Homebuyers in Delaware often focus on the prices listed for properties, but price alone does not represent the total amount that a person will spend when purchasing a home. Numerous fees, insurance premiums and commissions create what are known as closing costs. Closing costs routinely total several thousand dollars. A typical property transaction will split these costs between the buyer and seller, although the parties can negotiate the details and shift some expenses one way or the other.

In general, a property transaction will obligate buyers to pay fees for mortgage loan processing, home inspection, home appraisal and title search. Additionally, home property insurance, points charged by a lender and credit screening will add to a buyer's costs. He or she also must pay local government recording fees and escrow fees that create a fund to cover property taxes and insurance for several months. If a buyer chooses to consult a lawyer, then the closing costs will include legal fees.

Delaware residents who are interested in real estate investments might want to consider short sales. These transactions involve the owners selling their properties for less than the amounts that they owe and can offer the potential for good profits.

People who are interested in making short sale offers will need to convince the sellers and their lenders that the short sales are in their best interests. Getting a comparative market analysis completed by a real estate professional that shows that the property is worth less than what is owed can help. It is also helpful in situations in which the sellers are in danger of default or foreclosure.