Disadvantage of Debt Consolidation – The Facts About Debt Consolidation

Disadvantage of Debt Consolidation - The Facts About Debt Consolidation

You will have no problem at all finding thousands of pages on the internet extolling the virtues of debt consolidation, but that is because they are all by people who are selling it as a service and therefore have a vested interest in pointing out the positive side. Getting to know what the possible disadvantage of debt consolidation can be is an altogether more difficult business, which is where this article comes in.

The first thing to say is that there is more than one type of debt consolidation, and the disadvantages are different with each one, so we will consider them separately. One form of consolidation is to take out a new loan in order to pay off all your debts. These are known as debt consolidation loans. The other way to consolidate debts is by using a debt management plan.

When you take out a new loan to pay off your debts, you are already at a disadvantage, because the very idea of taking on new debt is a risky strategy. Using a loan will certainly consolidate your debts, because you only have one single payment to think about, but it is very easy to end up worse off if you are not very careful.

Many people take the advice of the potential lender at face value and look at the single smaller monthly payment as an indication that they will be better off. A lower monthly payment does not necessarily mean that a new loan is going to cost you less than your old debts. The reason most payments for consolidation loans are lower is that the loan is for a much longer period than your other debts were. In many cases if you add up the total that you will have paid by the time your new loan is paid back you will find that it has cost you far more than your old debts would have.

There is another disadvantage of debt consolidation with a loan if you are not very careful about which debts you consolidate. A lender will want you to include all your current debts and take out a loan big enough to pay off everything you currently owe. That can be tempting because the simplicity of a single payment is one of the attractions of debt consolidation, but you need to be very careful or you can end up costing yourself more.

What frequently happens is that people include all their debts, some of which may actually be at very low rates of interest. If you do not check whether the new loan is at a lower rate than the debts you are paying off, you may in effect be swapping some of your debts for more expensive ones. Before agreeing which debts to consolidate you should list out all your debts with the corresponding interest rates that you are currently paying. Check the interest rate for the new consolidation loan and only include in it those debts that are at a higher rate of interest.

There are so many disadvantages with debt consolidation through a loan that the vast majority of situations are better dealt with through a debt management plan (DMP). In case you are not aware of how a DMP works, an experienced debt advisor negotiates with all your creditors and tries to set up new arrangements for paying back your debts. The idea is to reduce the amount you have to pay out each month by getting reductions in interest rates and other charges, which often includes writing off any penalty fees or extra charges.

When these negotiations are complete, you just make one single payment to the debt company and they have to deal with your creditors for you. You immediately avoid the big disadvantage of a debt consolidation loan, as there is no new borrowing involved, and the debt company often provide additional free services such as help with budget planning and tips for spending less.

A disadvantage of debt consolidation through a DMP is that they are only informal agreements, so you cannot force any creditor to participate if they do not want to. While many see this informality as a positive aspect of debt management, because it means you can change or get out of the agreement if your circumstances should alter, it does have a negative side too.

There is no formal protection with a DMP, so if a creditor decides they want to take you to court instead, there is nothing in the debt consolidation process that can stop them.

The other disadvantage of debt consolidation through a DMP is that there are fees involved. All debt management companies have to charge for their services, and these are usually built into the payments you make. You could arguably save on these if you undertook the negotiation process yourself, but most people would not feel capable of doing that and in any event you would lose part of the benefit in not having to deal with all your different creditors payments.

The most important aspect of debt consolidation is to get reliable advice from a reputable company, so that you are advised properly on which route is going to work best for you. It is easy to apply quickly to several companies and compare the proposals and recommendations that come back. Start with a list of recommended companies that have a proven track record.

Investing Basics for Beginners

Investing money is a way for individuals to save toward their goals, whether it be retirement, a child’s college education, or some other financial goal. Beginning investors need to take time to determine their goals and learn some basic concepts of investing before jumping right into making an investment. Successful investing takes much research, time, and patience. As beginning investors start to have some success in making money through investments, they will develop a degree of skill. However, there is still a degree of risk involved even the most seasoned and skilled investors. Finding the answers to some basic investing questions will help make the efforts of beginning investors more successful.

How much money do I need to make an investment?

One common misconception by beginning investors is that they must have a large sum of money to make an investment. The truth is, many investments can be made for as little as hundreds or perhaps a few thousand dollars. One way to begin investing small is through dividend reinvestment plans or direct stock purchase options. Investors may be able to invest in a company’s stock options by paying a minimal start-up fee, often as little as $25 or $50 and making an initial investment. Once the money begins adding up, it can then be transferred to a brokerage account, where the investor will be able to begin investing larger sums of money.

What are the different types of investing?

Once investors determine that they have enough money to make an investment, the difficult part is often deciding where to invest their money. There are many different options for investors; some of the most common investment options are mutual funds, bonds, futures, and real estate.

    • Mutual funds – A way for individuals to invest without having to manage their investment “hands-on” is through investing in mutual funds. Mutual funds are investments that are handled by a fund manager. This fund manager invests the pool of money, contributed to by several individual investors, in the financial marketplace. The funds may be invested through closed or open-ended funds. Closed funds have a set number of shares that are distributed to the public and are traded on the open market; whereas open-ended funds to do not a set number of shares. The trader will re-invest into new shares for the investor. The shares are overseen by a professional money manager who is trained to select investments that will provide the largest returns to the investor.

    • Exchange traded funds – These funds, known as ETFs, are pools of investor money that is invested in similar ways to mutual funds. However, since ETFs are designed only to track certain indexes and much of their management is computerized, their maintenance costs and fees are generally much lower.

    • Bonds – When investors purchase bonds, they are buying an interest in a company or corporation. The companies issues bonds, which is a loan from an investor. In turn, the company agrees to pay this investor back at determined intervals with interest. Investing in bonds can be a fairly secure investment. Unless the company goes bankrupt, the investor is almost certain to receive back at least the minimum amount of his investment. These interest payments at set intervals can be a source of steady income for retired couples or others wishing to create a type of investment where they can generate consistent returns. The interest earned on bonds can be tax exempt with some types of bonds.

    • Real Estate – Real estate can a good investment when the timing is right but often requires a lot of work. One easy way for investors to enter the real estate market is through a real estate investment trust, or REIT. Investors become part owners in the investments of the REIT such as malls, park garages, hotels, or other real estate ventures. REITs often pay out high cash dividends to investors because the REIT pays no federal income tax in return for paying out 90 percent or more of their profits to shareholders in the form of dividends. Another way of making money through investing in real estate is through purchasing properties, improving the properties through repairing them or adding amenities, then selling them at a profit; or renting the houses to tenants and receiving a monthly income from the payments.

  • Futures – Futures trading is the marketplace where buyers from around the world buy and sell futures contracts. A futures contract is an agreement to receive a product at a future date with a set price. Once the price is agreed upon, the price is secure for the next year regardless of the changes in the market. Some common futures markets include commodities, currencies, stock indexes, interest rates, and other alternative investments such as economic indicators. The rewards of this kind of investing can be great but so are the risks. Therefore, futures should be left to the most experienced investors.

Should I diversify or stick with one investment?

Most professional investment advisors will confirm that diversification is the key to a successful investment portfolio. Investors who spread their investments out through several avenues reduce their risk of losing all of their assets should the investment fail. While it may be tempting to dive right in and start investing large sums or money, beginning investors should balance the potential profit against the risks they are exposing themselves to in the investment marketplace.

Using the services of a professional investment advisor

A professional investment advisor can provide beginning investors with the basic information needed to start an investment portfolio. An investment advisor sometimes is also a financial planner and can help with all financial matters. Some investment advisors are paid a percentage of the value of the assets managed, while others charge an hourly fee or are paid on a commission basis.

For investors who would like to avoid these fees, the best strategy is to do some study and start with mutual funds or ETFs offered by reputable companies.

Things To Consider When Choosing A Finance Company

Things To Consider When Choosing A Finance Company

There are so many things to consider when it comes to choosing a finance company. Finance companies usually provide leasing or hire purchase contracts to the small and other business owners. There are several types of finance companies in the market. For example, some finance companies are the subsidiaries of the major banks.

Some companies provide finance to promote marketing of their own products. A typical example of this kind of finance companies is car manufacturers. Some suppliers of the business equipments and other kind of equipments also facilitate financing. Adding to this list are the members of the finance and leasing association and some other independent houses also.

Competition is Growing Among The Finance Companies:

There has been a significant increase in the number of finance companies entering in the market recently. This is naturally resulting in fierce competition among the finance companies. Growing advertisements of the finance companies in the major newspapers is a proof of this fact. How can you judge whether a particular finance company is right for you or not? First, you should look for the reputation when choosing a finance company.

It should have a good reputation in the market and even better if it is also a member of the finance and leasing association. The second thing is that whatever kind of contract you have with the finance company, it should be in accordance with some type of written or verbal quotation.

The duration of the leasing agreement should be long enough to cover the period for which the asset is required. The finance company you are going to choose should be open enough to tell in advance regarding the penalties if any in case of early termination of the leasing agreement. Prepayment penalty is the biggest hidden cost of borrowing any loan. You should avoid companies that charge any such penalties.

In other words, you should choose a finance company that tries to hide nothing from you. You get to know every condition of the company before signing the agreement including the amount of rentals and the notice and hire periods. Moreover, also make sure that whatever equipment you are going to lease from the finance company is new.

You should not forget that when you choose a finance company, it is not a short-term deal. You cannot take it easily, because you have to maintain relationship with the company for a longer period. It will be better if you can choose a finance company that gives you the flexibility of switching between the floating and fixed rates while not charging a single penny extra for this facility.

Important Guidelines to Go For Low Rate Loans

Important Guidelines to Go For Low Rate Loans

Almost all people manage their requirements to run a business, invest, buy major items, meet unforeseen expenses, for medical purpose or for consolidating their debts. But getting low rates loans is important as you have to always keep in mind that the loans are to be repaid.

There is lot of competition between loan providers and they offer low rates loans. But it is not always easy for every one to get loans low rates. There are factors, which influence your eligibility to get less rate loans. The main factor is your credit score. A good credit history can save you a lot on the interest.

All the companies are offering loans want to keep their money secure. You should get offers from all such companies giving loans and make a thorough analysis to compare their offers. With this information you should be able to decide a company giving the best rates.

It will however, depend on the person and his profession to decide the company to get a loan from. For those who are running a business or are self employed, it may be better to get loans low rates from a local bank or lender. These loaners mostly focus on your bank account in terms of cash flow. A better account performance may be a positive point.

The situation for an employee seeking loans low rates will be different. If you want to get loan with your poor credit rating, it will be a hard task to convince the lender to approve your loan.

It is mostly observed that college students avail loans and spend money lavishly without caring. They only realize their mistake when it comes to paying back their loans to the loaners. This makes their credit history bad and it becomes difficult to secure loans low rates when they badly need a loan for some important purpose after getting employed.

All financial institutions and lenders offering low rates loans are there to earn money and not for a free service. The lenders will not be prepared to risk their money under any circumstances and will secure the money when they lend to anybody with a bad credit rating and charge higher interest.

In case you are able to get approved loans less rates, it is very important to ascertain the stipulated terms and conditions in the loan agreement cautiously. This care is needed so that you do not become a defaulter. In that case it will cost you a lot more than you are expecting.

It is also necessary to evaluate that the repayment period approved is practically feasible for you and you are not put into a hardship to make the repayment installments. It is particularly important to consider for business people for paying back loans.

When you go for getting a loan, it is necessary to understand your exact requirement and the type of loan that will suit you most. If you do not understand properly about the loan you are borrowing, it can have serious implications.

It should not put you in trouble with its heavy price to pay rather than helping you. You should borrow what is feasible for you to pay back in the associated repayment period and at the lowest rates so that you can get benefit from loans and repay comfortably without becoming a defaulter. The loaners and conditions of loan agreements should suit you for loans.

Asset And Sales Finance Can Aid Business Development

Asset And Sales Finance Can Aid Business Development

When it comes to setting up a new business, it can be difficult to come to terms with business terminology – especially if the process of setting up and running a company is completely alien to you. For instance, speaking to your bank about asset and sales finance may be a daunting notion in itself; but when you consider the possibility of getting tangled up in the jargon – and perhaps even losing credibility with your bank – the experience seems even more intimidating.

However, if you keep your wits about you and make sure that you’re up to date on the latest financial terms, your bank’s asset and finance solutions are sure to benefit your business.

Make sure you begin with the basics: for starters, familiarize yourself with what asset and sales finance is. Essentially, asset and sales finance is a service through which banks can help businesses obtain a range of equipment – including plant and machinery, IT equipment, commercial vehicles, office furniture and cars, among a range of other necessary business items.

The fundamental difference between asset financing and sales financing is that sales financing will help businesses obtain quick access to cash, while asset financing helps companies fund business equipment.

Cost-effective and expedient sales financing solutions will help businesses find enough working capital for operation. Factoring and invoice discounting are two important sales financing solutions.

With factoring, for instance, up to 95 per cent of the value of approved invoices can be advanced within a certain time period, with the balance being paid on receipt. Invoice discounting involves a similar process, but with one crucial difference: in factoring, the client’s customers are aware of the bank’s involvement, whereas in invoice discounting they are unaware.

Asset financing is important because it will help business owners acquire assets in a financially viable way, without eating into vital cash reserves. Many banks and financial providers will offer a range of asset financing solutions to its customers. Hire Purchase is one example of an asset financing solution; this can help businesses obtain the asset they need immediately, but payments may be spread across the life of the asset in question.

Hire purchase schemes will often allow you to keep the asset in question for a certain fee at the end of your term. Another important asset financing solution, called Operating lease, will allow a business to benefit from a particular asset, while the bank itself will take on the risk of the depreciating value of the asset.

Various banks and financial providers will offer a range of asset and sales finance solutions to their customers, regardless of the business tools and supplies that are needed. For example, some asset and sales finance providers, like Barclays Asset and Sales Finance will offer two separate leases: a Technology Lease to help a business’ technology needs and an Agricultural Lease which offers finance towards the purchase of machinery, land and vehicles, as well as a range of other benefits.

Tips on How to Save on Costs – Get Low Rate Loans

Tips on How to Save on Costs - Get Low Rate Loans

Recession, unemployment and cost cutting… these are the most frequently heard words doing the rounds today. Almost everyone is in saving mode. And, this holds true for both the business as well as the salaried class. With the economy struggling to recover and individuals toiling to make ends meet, it makes perfect sense to scout around for minimum loan rate, should the need for a loan arise. Read on for some tips.

How to choose Personal Loans:

It is quite easy to get low rate personal loans with longer repayment terms and flexible conditions. These low rate loans are easier on the customer since the repayment installments are affordable and convenient. But, here also, you should know that secured personal loans are better and more cost-effective. This is because here the customer has to pledge collateral as a guarantee to make the full and timely repayment of the loaned amount.

If you are a person who owns assets, this is the best option for getting low rate loans. The cost of the loan is determined by the interest rate charged on the loan amount. To reduce the overall cost, it makes sense to choose a loan with a lower interest rate.

Go on the Net:

The Internet is a great place to start your search for minimum loan rates. In fact, it is the first place to go for some ideas about low rate loans. You can turn to search engines like google.com etc, and also log onto social networking sites to gather all the important information. Forum discussions can also make you more knowledgeable about low rate loans. You can often find affordable and reduced loan rates online. Remember, low loan rates are usually offered only to people with high credit ratings.

Loan term makes a difference:

How long you take out a loan for can be the deciding factor between high rate and lminimum loan rate. If the term of the loan is long, the monthly installments will be smaller. The loan will undoubtedly be cheaper in the immediate future, but it is more expensive in the long run. Hence, one should go into all the details carefully when looking for a low rate loan.

Credit rating is important:

If you are looking for low rate loans, then ensure that your credit history is good. This will show that your repayment capacity is reliable. The lender will then be willing to bring down the interest rate and this will make your loan more economical.

Some important details:

Low rate loans are usually available to people who fulfill the following conditions:

* A good employment history in a reputable company can get a person low loan rates
* A good balance in a bank account can also be favorable in securing low loan rates
* Any assets you have are counted as positive factors when it comes to minimum rate loans
* A good credit statement reflecting financial stability is extremely important to secure less loan rates.
* Another way of getting low rate loans is to approach a lender who is known to you and with whom you share a certain rapport.

Accounts Receivable Financing – Be Inspired

Accounts Receivable Financing - Be Inspired

Benjamin Zander and his wife wrote a book entitled: “The Art of Possibility; Transforming Professional and Personal Life”. Their idea is that “you can create a passionate energy permeating The Art of Possibility that will be a true force in your life. You can make your own rules.” Their book is inspirational. You will be inspired if you buy and read it. The question is: how does this pertain to accounts receivable financing?

It’s all about attitude, enthusiasm and point of view regarding how to conduct your business. Can you make your own rules regarding how banks, commercial finance companies and other financial entities operate? Of course not. Can you make your own rules regarding how you utilize the financial recourses that are available to finance your business? Absolutely!

Here are three examples how to harness the power of accounts receivable financing sometimes with other types of financing to grow your B2B business.

Case Study One:

A Solar Energy Company that designed and supervised the installation of renewable energy systems was unable to obtain bank financing. They were one of the area’s lowest cost providers of solar panels, system design and supervision. One of their biggest assets was State Solar Tax Credits that are paid to homeowners who install the solar energy systems.

An obligation from a State to a consumer is not within the definition of an account receivable. In other words, it could not be financed because it was not an obligation to a business. Using the art of possibility, the homeowners were persuaded to assign their solar tax credits to the Solar Energy Company. This transformed a consumer receivable into a commercial accounts receivable. Voila! The Solar Energy Company received accounts receivable financing it needed to grow.

Case Study Two:

An individual purchased an Importing Company that had been financed with a bank’s SBA loan. As collateral for the loan, the bank placed a UCC1 filing on the accounts receivable and inventory of the business. UCC refers to the Uniform Commercial Code in effect throughout the United States of America. In some respects, it simplifies the process of lending, selling and borrowing nationally. In other ways it is very complex.

A UCC1 filing by a bank usually prevents any further financing because there is no collateral left to be financed. It is similar to a first mortgage loan on a house. If you have a 95% loan on your house, no other financing is available on the house because there is no equity to lend on. Using the art of possibility, the Importing Company was successful in convincing the bank to subordinate their UCC1 filing to another commercial lender’s UCC1.

The Importing Company convinced the bank that it would be mutually beneficial to lower the bank’s UCC1 lien to a secondary position to allow a commercial finance company to offer new accounts receivable financing and inventory financing. Voila! The Importing business has a new credit line available for growth. It is now more profitable and the bank is more likely to be repaid. This is a win-win situation.

Case Study Three:

A start-up Clothing Company involved in manufacturing, distributing and designing T-shirts landed a substantial purchase order for their product. The product was to be made in China, and the Clothing Company lacked sufficient funds to pay for the costs of manufacture and distribution. Using the art of possibility, the Clothing Company obtained a letter of credit to guarantee the Chinese factory of payment, purchase order financing to pay for the T- shirts upon delivery, and accounts receivable financing to pay the purchase order company upon delivery of the goods to the customer in the US.

Personal Loans – An Easy Solution to Resolve Your Financial Limitations

Personal Loans - An Easy Solution to Resolve Your Financial Limitations

A variety of loans satisfying various needs are available today. Though a number of them have come into existence, personal loans have retained their status. They are highly valuable and the preferred type for many. Here is a discussion on the various types of personnel loans, their advantages and disadvantages.

Types of personal loans:

There are fundamentally two types of personal loans, the secured type and the unsecured type.

Secured type of personnel loan: As implied by the name, this type of personal loan can be obtained only if the borrower keeps an asset such as real estate property, car or jewelry as security with the lender. The loan amount to which the borrower is entitled depends on the collateral amount shown by him.

However, other requisites such as good credit report and employment status are also necessary for the applicant to qualify for secured type of personnel loans.

Unsecured type of personal loan: All the requisites for this type are the same as that of the secured loan except for the security deposit. Unsecured type of personal loans does not require any security.

Both these personal loans can be obtained very easily through a great number of online lenders. However, it is essential to check the authenticity of the lender before keeping any valuables in the form of security.

Advantages of personal loans:

1. Low interest rates: To avail this benefit to the full extent, take a maximum eligible amount as the loan amount.

2. Fixed interest rates: Unlike other loan types where the interest rates vary as per the market trends, personnel loans are very safe in this respect. If you select the stable interest rate plan instead of the floating interest rate plan, you can well plan for the loan payments very easily.

Factors to be checked at the time of selecting personnel loans:

1. Plans offering a gift amount: Certain lenders introduce plans that promise a gift upon applying for a loan. Never fall for such tricks! This will increase your loan amount in the form of interest rates.

2. Analyze all the available plans carefully. It is recommended to go for a basic plan with simple terms and conditions. Make sure that the personnel loans plan is easy to repay.

3. Payment protection insurance: Certain lenders try to sell you payment protection insurance at the time of taking the personal loans. They say that the insurance repays the loan in case of your death or repays the loan payments in case of major accidents, business loss etc.

Though these insurance advantages sound very good, do not get into them. Taking the insurance increases the monthly personnel loans payments.

4. Go through the documents carefully before signing: Go through each and every clause twice. If you are not clear on any information do not hesitate to get it clarified from the lender. Also, assess your financial status to make it clear if you can repay the personnel loans within the loan period.

From the above discussion it can be seen that personnel loans are the best loan plans to satisfy your financial limitations. However, beware of lenders who are out there to just make profits.

Affordable Health Insurance And The Wisdom In Loyalty Discounts

Affordable Health Insurance And The Wisdom In Loyalty Discounts

Affordable health insurance: If you want discounts, buy your health insurance policy from the same insurer you bought your other policies from. Every insurance company normally offers a discount if you buy more than one policy from them.

That said, it may not serve your best interest to do this as you might be better off if you buy each of your policies from different insurers. I’ll take some time out to explain this…

We’ll make believe that a certain profile got the following rates from different insurers when he shopped for different insurance policies…

Insurer A…

Health insurance: $2,320

Auto insurance: $2,487

Home insurance: $1,400

Insurer B…

Health insurance: $2,724

Auto insurance: $1,472

Home insurance: $2,120

Insurer C…

Health insurance: $1,640

Auto insurance: $3,500

Home insurance: $2,080

As is now obvious, the insurer who offered the best quote for auto insurance did not have the best for any other insurance policy. So here’s what he’ll get with a 10% discount if he goes ahead to still buy all his policies from Insurer B…

$1,472 + $2,120 + $2,724 = $6,316

$6316 – (10% of $6316) = $5,684.40

On the other hand, he’ll spend the following on insurance as a whole if he goes for the insurer who offers him the best for each policy…

$1,400 + $1,472 + $1,640 = $4,512

So even though he’ll get a multi-policy discount if he buys all his policies from one insurer, he’ll not save as much as he did by buying from different insurers. $1,172.40 is certainly not an amount you should throw away and that’s what he could have lost if he opted for a multi-policy discount instead.

You might be wondering how to find out whether it’s better for you to pass off a multi-policy discount or go for it. So here’s how to find out…

Make out some time to get and compare quotes for each of your different insurance policies from at least three insurance quotes sites. Pick the lowest rates offered for each your insurance policies and then simply compare their total with the total you’ll pay after a multi-policy discount and you’d know which is better in your case.

Residential Real Estate Closings in Rhode Island

Residential Real Estate Closings in Rhode Island

Q. What is a purchase and sales agreement?

A purchase and sales agreement is a contract to buy and sell real estate. The agreement should contain the terms and conditions of the deal (i.e. buyer, seller and property information, sales price, closing date, deposit information, mortgage contingencies, property inspection, etc.).

Q. Do I need a real estate attorney to review the purchase and sales agreement before I sign it?

Often a standard Realtor’s purchase and sales agreement is used for the conveyance of residential properties in Rhode Island. These agreements are well written and balanced for all parties. Most purchase and sales agreement are packed with important dates, terms, and conditions, which require the attention of both parties. It is important to have a real estate attorney review the agreement prior to signing it.

Q. What steps must the buyer take prior to the real estate closing?

There are many issues that need to be addressed by both parties prior to the closing. The buyer must: apply for a mortgage; notify the seller if the buyer cannot obtain a mortgage; conduct the agreed upon inspections; notify the seller of any material deficiencies discovered by the inspections; choose an attorney for the closing; obtain insurance; contact the electric and gas company(s) contact other service providers (i.e. telephone, cable, etc.); and inspect the property prior to the closing.

Q. Does a buyer of real estate need a survey of the real estate?

The buyer of real estate in Rhode Island is not required to survey the property before the closing. However, our office always recommends that a buyer of real estate have the property surveyed and purchase the necessary title insurance endorsement to cover any errors with the survey.

Q. What information will my real estate attorney need to prepare for the closing?

The following information should be forwarded to the closing attorney by the buyer as soon as the purchase and sales agreement is signed: purchase and sales agreement; seller’s disclosures; seller’s and seller’s attorney’s information, buyer’s and realtor(s) information including address and telephone numbers; and other relative information. The buyer should immediately provide the closing attorney’s contact information to the lender.

Q. What will my closing attorney do before the real estate closing?

Your closing attorney will have to obtain a municipal lien certificate (MLC); conduct a title search; review the title search and recorded maps; draft a title commitment; obtain a title closing protection letter; prepare lender required information (i.e. wiring instructions, etc.); obtain the final water and sewer bills; prepare the HUD; prepare and review closing documents; review the loan documents; and other pre-closing tasks.

Q. What steps must the seller take prior to the real estate closing?

The seller of real estate is responsible to maintain insurance coverage until after the closing; maintain the home as described in the purchase and sales agreement; obtain a smoke detector certificate; provide the buyer with a water meter reading; allow the buyer access to the property for home inspections; provide proof of compliance with RIGL 44-30-71.3 either by a seller’s residency affidavit (Rhode Island resident seller) or by a certificate of no taxes due (non Rhode Island resident seller)

or the closing attorney must withhold 6% of the total sale amount at the time of the closing; prepare the deed to convey the real estate to the buyer; obtain and forward to the closing attorney an invoice from the seller’s attorney; obtain and forward to the closing attorney a commission statement from any involved realtors; and other related tasks.

Q. What is a real estate closing? What will occur at the closing?

The real estate closing is a final gathering of all of the parties involved in the real estate transaction (i.e. the Buyer, Seller, and Lender). Attorneys for the parties will meet with the parties to sign and officially transfer title to the buyer. The closing attorney will facilitate the transfer of title and is responsible for recording the new deed. Rhode Island buyers of residential real estate have the right (in accordance with state law) to choose the closing or title attorney.

Q. What should the buyer do immediately prior to the closing?

Before arriving at the closing, the buyer should walk the property to assure that everything is in the agreed upon condition. The buyer should also have all the necessary paperwork and certified checks for the seller and for various closing costs.

Q. What does my real estate closing attorney do after the real estate closing?

There are a number of post closing issues including the following: updating of the title; recording of the deed, mortgage, and other related documents; payment of city taxes, water, sewer, tax stamps and recording fees; payoff of any existing mortgages; other payments (i.e. seller’s attorney, realtor commissions, title insurance, etc.); disbursement of funds to the seller; and generating the title insurance.