Frequently Asked Questions
We would love to answer any question you have! Here is a list of frequently asked questions. Please contact us if you have any further questions!
Title Insurance
Why Do I Need Title Insurance?
Owning real estate is one of the most precious values of freedom in this country. You want the assurance that the property you are buying will be yours. Other than your mortgage holder, no one else should have any claims or restrictions against your home.
Title insurance is issued after a careful examination of the public records. But even the most thorough search cannot absolutely assure that no title faults are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search. Title insurance eliminates any risks and losses caused by faults in title from an event that occurred before you owned the property.
Title insurance is different from other types of insurance in that it protects you, the insured, from a loss that may occur from matters or faults from the past. Other types of insurance such as auto, life, or health cover you against losses that may occur in the future. Title insurance does not protect against any future faults, but does protect you from risks or undiscovered interests. Another difference is that you pay a one-time premium for a policy that remains effective until the property is sold to a new owner - even if that doesn't occur for decades.
What is a Lender's Policy?
A lender's policy, also known as a loan policy or a mortgage policy, protects the lender against loss due to unknown title defects. It also protects the lender's interest from certain matters which may exist, but may not be known at the time of the sale.
This policy only protects the lender's interest. It does not protect the purchaser. That is why a real estate purchaser needs an owner's policy.
What is an Owner's Policy?
An owner's policy protects you, the purchaser, against a loss that may occur from a fault in the ownership or interest you have in the property. You should protect the equity in your new home with a title policy.
What Does an Owner's Policy Provide?
Protection from financial loss due to demands that may be charged against the title to your home, up to the cost of the title policy.
Payment of legal costs if the title insurer has to defend your title against a covered claim.
Payment of successful claims against the title to your home covered by the policy, up to the cost of the policy.
Why Does the Seller Need to Provide Title Insurance?
Any purchaser will need evidence that his investment in your property is free of title defects. The title insurance policy that you provide the purchaser is a guarantee that you are selling a clear title to your real estate, unencumbered by any legal attachments that might limit or jeopardize ownership. It will reassure your purchaser that he or she is protected from any risks or losses and could help you close your deal.
Why Does the Buyer Need Title Insurance?
Without title insurance, you may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title. As a result, you may be held fully accountable for any prior liens, judgments or claims brought against your new property. If this should occur, your title policy insures that you will be defended at no cost against all covered claims up to the amount of the policy.
How Much Does Title Insurance Cost?
The insurance commission approves and controls the premiums for title insurance policies. The premiums are paid only once and the cost depends upon the purchase price of the property and the policy amount must be equal to the purchase price.
What Does Title Insurance Protect From?
Undisclosed heirs
Forged deeds, mortgages, wills, releases and other documents
False impersonation of the true land owner
Deeds by minors
Documents executed by a revoked or expired Power of Attorney
False affidavits of death or heirship
Probate matters
Fraud
Deeds and wills by persons of unsound mind
Conveyances by undisclosed divorced spouses
Rights of divorced parties
Deeds by persons falsely representing their marital status
Adverse possession
Defective acknowledgements due to improper or expired notarization
Forfeitures of real property due to criminal acts
Mistakes and omissions resulting in improper abstracting
Errors in tax records
Wills and Power of Attorneys
What is a Will?
A Will is a document which provides the manner in which a person's property (assets and liabilities) will be distributed after death. A Will is not effective until death; the last one written (no oral wills) by date is the one in force. A person may change a Will as often as he or she desires.
Who May Make a Will?
The maker of the Will must be 18 years of age or older. The maker of the Will must also be of sound mind and free from improper influences.
When Should I Make a Will?
A Will should be made while the maker is in good health, free from emotional stress. A prudent person does not wait for a catastrophe or other compelling reason before making a decision.
A Will is more than just a piece of paper. It is a gift to your family. You never know when it will be your time to go, so don't delay any longer!
Why Should I Make a Will?
1. Provision for your spouse: In Louisiana, if you die without a Will, your half of your community property and all of your separate property is inherited by your children before it is inherited by your spouse.
2. Provision for your children, particularly minors: If your children inherit all or part of your estate, they may have immediate access to all of the funds that are available. If they are minors they will be subject to a guardian until their 18th birthday. By drafting a Will, you can put their interest in a trust that will provide when and under what conditions they will have access to their inheritance. If your children are minors, you can also name who you would want to become their guardian should something happen to you and your spouse.
3. Provision for special needs children or grandchildren: If you have children or grandchildren who may be eligible for governmental programs due to physical or mental disabilities, an inheritance from you may jeopardize that eligibility. In a Will, you can create a "special needs trust" which can allow you to supplement, rather than replace, any governmental programs.
4. Anticipate Louisiana forced heirship: Louisiana Law provides that you must make provisions in your estate for your children if they are 23 years old or younger or if they "because of mental incapacity or infirmity, are permanently incapable of taking care of their persons or administering their estate." If you have a child or grandchild who fits into this category, it is vital that provisions be made in a Will for their care and custody.
5. Specific gifts, including gifts to charity: By preparing a Will you can designate particular items to go to particular heirs. You can also treat heirs separately, recognizing that one may have greater needs or one may have received items prior to your death that others did not. You can also make provisions for people who are not in line to inherit from you, such as distant relatives, caregivers, and charities.
6. Estate tax planning: A properly drafted Will may reduce or eliminate the amount of taxes that have to be paid. Many Wills written without consideration of recent federal tax laws should be reexamined with reference to tax problems.
7. Naming an executor of your Will: The executor is the person who represents your estate to the court to see that your assets are passed on by Will or by law. You can designate a person to fill this role and give them expanded authority over what they can do without having to go to court to sanction their actions or possibly having to post a bond.
What Happens When I Don't Make a Will?
When a person dies without a Will, or dies "intestate", as the law calls it, the property of the deceased is distributed according to a formula fixed by law. In other words, if you do not make a Will, you do not have any say as to how your property will be distributed. If you are married and have children, your property will not automatically pass to your spouse. Instead, your spouse will receive the first $50,000 in property value, and the remaining balance will be split between your spouse and your children. If a person dies intestate, his or her administrator cannot carry on the business of the descendant without express approval from the court. In most instances the business must be sold. If the children are under age 19, the surviving spouse would have to be appointed guardian of the children by the court and provide a bond. This guardianship would remain in effect during the minority of the children. Such proceedings would entail considerable expense and would create legal problems that could have been avoided had the deceased spouse made a Will.
How Large an Estate is Necessary to Justify a Will?
Any amount of property constitutes and estate. If you own a home or are buying one, you have an estate. Personal and family circumstances are large factors in determining whether your estate warrants the making of a Will.
Who Should Draft a Will?
There are many variables that go into estate planning and determining just what is the best way to provide for yourself and your loved ones. The drafting of a Will and/or Power of Attorney is a delicate operation. It requires professional knowledge which can only be developed through years of training and study. Only a practicing lawyer can help you avoid the numerous pitfalls involved in drafting a will and can advise the course best suited for your individual situation.
How Much Does a Will Cost?
It depends. The fees for creating an estate plan can vary based on the types of assets you have, who your beneficiaries are, and most importantly, what your goals are. Every situation is different. During an initial consultation, our attorney will review your assets, beneficiaries, and goals. He will then make recommendations based on your unique situation. A few hours of an attorney's time may mean great savings in taxes and probate expenses. Usually, the cost of the surety bond, which may be waived by a Will, exceeds the lawyer's charge for preparing a Will.
What is a Power of Attorney?
A Power of Attorney is an extremely important document. It designates who can act for you, in what circumstances they can act, and just what they can do on your behalf. A Power of Attorney may be active now or can "spring" into effect upon the occurrence of a certain act or event. It is effective until death.
A general Power of Attorney may not be sufficient to authorize the agent to make major healthcare decisions, such as surgery, nursing home/specialized care decisions and/or medication. The Durable Healthcare Power of Attorney or specific health care language is needed to encompass these contingencies. A Durable Healthcare Power of Attorney does not allow for a decision concerning life-sustaining procedures, which can only be addressed by the Living Will or court order.
What is a Living Will?
A Living Will is a document that states what type of medical care you would like to receive should you become terminally ill and not able to make decisions on your own accord. A Living Will is effective only when a patient is diagnosed with a terminal and irreversible condition and cannot survive without extraordinary medical procedures.
Reverse Mortgages
What is a Reverse Mortgage?
A reverse mortgage is a special type of home loan that lets you convert a portion of the equity in your home into cash. The equity that you built up over years of making mortgage payments can be paid to you. However, unlike a traditional home equity loan or second mortgage, HECM borrowers do not have to repay the HECM loan until the borrowers no longer use the home as their principal residence or fail to meet the obligations of the mortgage. You can also use a HECM to purchase a primary residence if you are able to use cash on hand to pay the difference between the HECM proceeds and the sales price plus closing costs for the property you are purchasing.
Can I Qualify for FHA's HECM Reverse Mortgage?
To be eligible for a FHA HECM, the FHA requires that you be a homeowner 62 years of age or older, own your home outright, or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan, and you must live in the home. You are also required to receive consumer information free or at very low cost from a HECM counselor prior to obtaining the loan.
Can I apply for a HECM even if I did not buy my present house with FHA mortgage insurance?
Yes. You may apply for a HECM regardless of whether or not you purchased your home with an FHA-insured mortgage.
What types of homes are eligible?
To be eligible for the FHA HECM, your home must be a single family home or a 2-4 unit home with one unit occupied by the borrower. HUD-approved condominiums and manufactured homes that meet FHA requirements are also eligible.
What are the differences between a reverse mortgage and a home equity loan?
With a second mortgage, or a home equity line of credit, borrowers must have adequate income to qualify for the loan, and they make monthly payments on the principal and interest. A reverse mortgage is different, because it pays you – there are no monthly principal and interest payments. With a reverse mortgage, you are required to pay real estate taxes, utilities, and hazard and flood insurance premiums.
Will we have an estate that we can leave to heirs?
When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid. All proceeds beyond the amount owed belong to your spouse or estate. This means any remaining equity can be transferred to heirs. No debt is passed along to the estate or heirs.
How much money can I get from my home?
The amount you may borrower will depend on:
In addition, the more valuable your home is, the older you are, and the lower the interest rate, the more you can borrow. If there is more than one borrower, the age of the youngest borrower is used to determine the amount you can borrow. Many online reverse mortgage calculators can provide you with an estimate of the amount of funds you can borrow.
How do I receive my payments?
You can select from five payment plans: