Posts Tagged ‘Closing Costs’

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Financing That Dream Home with a Mortgage? Here’s What to Expect on Closing Day


2016
09.13

Financing That Dream Home with a Mortgage? Here's What to Expect on Closing DayThere are so many details that lead up to the purchase of your dream home that it can be hard to realize it when the closing day is finally upon you. However, when closing day finally arrives, there will still be a few last minute details that need to be taken care of. If you’re getting ready to solidify your home purchase and are wondering about the remaining paperwork and any unknown details, here are some things you can expect when it comes to making your purchase complete.

One Last Walk Through

A home inspection is an important part of any home purchase, but buyers often have the option to go for one final walk through on closing day in order to determine if any additional damage has been done. This will help to ensure that if any additional issues have appeared, they can be discussed and taken care of by the seller. While it might seem like the home inspection should take care of things, a last walk through can be very important in ensuring you don’t get stuck with unwanted – and potentially expensive – repairs.

A Few Helping Hands

Most of the details will be taken care of by the time closing day comes, but that doesn’t mean it will be up to the lawyers to settle everything for you and the seller. Instead, you can expect a wide cast of involved parties that can range from the seller’s agent to the title company representative to the closing agent, in addition to the homeowner and yourself. It’s just important to be aware that which parties are involved will be dependent upon where you live.

A Bevy of Documents

Purchasing a home is not without an abundance of paperwork, but there will be a few more documents to deal with during your closing meeting. In addition to documents that outline the agreement and the property transfer, there will be others like the deed of trust, the settlement statement and the mortgage note that verifies that the buyer will pay back the mortgage loan.

There are many stressors that come along with the purchase of your home, but by taking all the documents you need and being prepared to deal with all the engaged parties, the day can go a lot more smoothly. If you’re currently looking into a mortgage and are on the market for a home, contact your local mortgage professional for more information.

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The Type of Home You Want to Buy Determines Your Closing Cost and Here’s Why


2016
08.25

Savvy home buyers who are preparing to make a real estate purchase should do their research and understand that they need to save money for not only the down payment but the closing costs as well. The closing costs can account for as much as three to five percent of the sales price in some cases, so this can be a rather sizable amount of money. Some home buyers however, may not realize that the amount of closing costs can vary considerably based on the home that is purchased. With a closer look at why this is, home buyers can make a more educated decision when selecting a home to purchase.

Prepaid Taxes And Insurance

One of the most significant closing costs relates to prepaid taxes and insurance, and both of these expenses are directly tied to the location and value of the property. Consider that the property tax rate can vary based on the city, county, and state. Real estate insurance can also vary based on the type of construction of the home if the home is located in a flood plain and other factors. These are only a few examples of how the location and property type can impact these fees, and home buyers should consider the costs associated with the tax rates and insurance when selecting a property to purchase.

Third Party Reports

There are several third party reports that are commonly paid for at closing, and these include an appraisal, a survey, a pest inspection and a property inspection. The third party reports may vary in cost based on the size of the home, the amount of land that is being purchased, and even the condition of the property. Those who want to keep their closing costs lower may consider learning more about how these fees are calculated up-front before finalizing their plans to buy a specific home.

Title Insurance Fees

Title insurance fees are another typically sizable expense for home buyers, and this insurance offers protection to the lender if the title is not clean. Title insurance can increase based on the size of the property as well as different factors that are revealed with a title search. This information can be difficult to learn with an initial home search, but home buyers should be aware that title defects can increase closing costs.

The location, size, age and construction of a property all impact the closing costs. Those who are shopping for real estate may be inclined to make a decision that keeps closing costs down, and they can reach out to their knowledgeable mortgage professional for more assistance with their particular situation.

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4 Ways to Help Your Mortgage Transaction Close On Time


2016
07.07

4 Ways to Help Your Mortgage Transaction Close On TimeWhen you’ve finally found the home you’re looking for at the right price, it’s easy to think that the hard part is over; however, there’s still a lot to do in order to ensure your purchase goes through without a hitch. If you’re tying up the loose ends on your home purchase, here are some things you should do to avoid any unnecessary delays.

Hire A Legal Professional

However much research you may have done in regards to buying a home, there’s still a lot of legal jargon in the closing documents that can be difficult for most people to understand. Instead of doing guesswork, you may want to use an attorney who will take the difficulty out of the documents for you so there will be no holdups with the paperwork.

Arrange A Home Inspection

A home inspection is a necessary step before the sale of a home, but this is an important one to get out of the way because it can seriously impact your home purchase. Because major problems can often be discovered during inspection, getting this out of the way and deciding if an item should be fixed or the total price knocked down will ensure there are no delays at the last minute.

Acquire Title Insurance

In order to make sure your property really belongs to you, it’s a good idea to have a title search completed to see if there are any claims to your future property that could invalidate your purchase. As this is a legal safeguard for your claim to your home, it will help you avoid unnecessary issues in the event of an unknown property claim.

Determine The Closing Costs

An escrow company is responsible for holding the funds until all aspects of a home sale are complete, but there are fees that go along with this service. Before you get to the end of the process, determine what exactly the company will be charging so that you can be prepared for the final total. While fees are legitimate, if you see a higher tally than expected, you may want to negotiate for a reduced cost.

Purchasing a home is a significant investment full of hurdles you might not be aware of, but by acquiring title insurance and having a legal professional look through your documents, you can make your home purchase go a little smoother. If you’re planning on purchasing a new home soon, contact your local mortgage professional for more information.

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What Happens at a Mortgage Loan Closing Meeting? Let’s Take a Look


2015
12.03

What Happens at a Mortgage Loan Closing Meeting? Let's Take a LookSo you’ve found the perfect home, the seller has accepted your offer, and now you’re just waiting for the mortgage to close before you wrap up the sale and take possession. It’s time for the closing meeting.

But what does this meeting entail? And what do you need to prepare for it? Here’s what you need to know.

The Day Prior: Walking Through The Property

24 hours before the closing meeting, you’ll be given an opportunity to walk through the property and do a final inspection. During this inspection, you’ll be able to look for any damage that may have occurred between contract and closing, which means you can negotiate repairs with the seller.

It can be a good idea to schedule your closing date around the 20th of the month, so that if you do find any problems during the walkthrough, you can address them before you take possession.

The Closing Meeting: Title Insurance, Contracts, And More

Typically, the mortgage closing and the home sale closing happen at the same time. During your closing meeting, you’ll need to sign – and bring – a variety of documents in order to take possession of the home. You’ll want to ensure that you bring your good faith estimate, proof of homeowners insurance, contract, and inspection reports to this meeting.

You’ll also want to bring any and all documents that you sent to your bank as part of the home buying process. At this meeting, you’ll discuss the sale with the seller, the seller’s agent, the representative from the title company, the closing agent, the lender, and any attorneys that may be present. By the end of the meeting, you’ll receive a variety of documents, including a deed of trust or mortgage contract and a settlement statement.

You may also be required to sign a mortgage note, which is a note that states you intend to repay the mortgage loan. This note details the terms of your mortgage, including the amount of the loan and what action the lender is entitled to take if you miss payments.

A mortgage loan closing meeting doesn’t have to be complicated. Although there’s a lot that will happen at this meeting and there are a number of documents you’ll need to bring, a qualified mortgage advisor can guide you through the process. Contact your trusted mortgage professional today for a list of what you’ll need to bring and what you can expect to happen at your closing meeting.

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How Much Should You Budget for Closing Costs? Let’s Take a Look


2015
10.14

How Much Should You Budget for Closing Costs? Let's Take a LookIf you’re in the market for a new home, you’re probably trying to budget for all of the expenses that come with a home purchase. After all, the asking price isn’t necessarily the entire amount that you’ll pay – there are other expenses that will factor in to the final price. One such expense is your closing costs.

Closing costs are the miscellaneous fees you’ll pay when you sign the deal to buy your home. But how much do you need to save up for closing costs? Here’s what you need to know.

The General Guideline for What to Expect

Most mortgage advisors will tell you that you should expect to pay about 3 to 5 percent of your mortgage in closing costs. By law, your mortgage provider is obligated to give you a Loan Estimate form which is designed to help you understand the key features, costs, and risks of the mortgage loan. Three business days before the loan closes your mortgage provider will also give you a Closing Estimate form to review all of the costs of the transaction including all closing costs.

How Your Closing Costs Break Down

Your lender will give you a breakdown of costs in your Loan Estimate and Closing Estimate. But in general, there are certain closing costs you can expect to pay.

One cost that most lenders include is the loan origination fee, a small charge to compensate the lender for the time it takes to prepare the initial loan documents. There will also typically be a loan application fee, which can vary per lender.

Your lender may require you to get private mortgage insurance depending on your situation. The title search and title insurance to protect your lender from title fraud is another fee you should consider, and you’ll also likely want to buy title insurance to protect yourself.

There are also several other closing costs to keep in mind, like escrow fees, notary fees, pest inspections, underwriting fees, and the mortgage broker’s commission. All in all, you’ll want to budget approximately $5,000 in closing costs for every $100,000 you borrow.

Closing costs can be quite expensive, which is why you’ll want to make sure you budget appropriately when you buy your new home. A mortgage professional can help you to figure out how much you need to budget for closing costs. Call your local mortgage advisor today to learn more about budgeting for the home buying process.

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The Quick and Easy Guide to Understanding the Math Behind Your Mortgage Closing Costs


2015
09.15

The Quick and Easy Guide to Understanding the Math Behind Your Mortgage Closing CostsIt’s amazing that in a year with extremely low mortgage rates being reported around the country, closing costs are up by as much as 6% from the previous year. Part of the reason for this is that the stricter regulations on loans have increased the costs to banks, and they always find a way to pass on new costs to the consumer.

Understanding Third-Party Closing Costs

When closing on a mortgage the borrower will notice a long list of additional fees that they are expected to pay for. These can range from insignificant into the thousands of dollars depending on the state and the deal. When looking at these fees you will notice that some are third-party fees.

This is not out of the ordinary and you are not being taken advantage of. These costs are for services rendered by outside companies at the request of the mortgage lender to make sure everything is in order with the property.

Closing Costs You Can Expect To Pay

Anybody going through the mortgage process for the first time should expect to see several odd sounding terms on the bill. The first is ‘origination’ or ‘processing’ which is the primary fee the lender charges for creating the mortgage.

Other fees include discount points, flood certification, title insurance, credit report and appraisal. These are all necessary for buying a home and should be expected to appear when closing.

The Trick Behind Zero-Closing Cost Mortgages

With closing fees adding up it may seem like a good idea to opt for a mortgage that has absolutely no closing costs if it’s offered. While no money will be required up front, it adds up in the long run.

This is because the lender is making a deal. They agree to pay all the closing costs for the borrower in exchange for a slightly higher interest rate, which will pay out for them over the course of the mortgage.

The amount you can expect to pay really depends on the cost of living and real estate market where you’re buying. A mortgage specialist will be able to talk to you in advance of applying for your mortgage to give you a better idea of what you are looking at paying for closing costs. Contact one today for more information on why you have to pay closing fees and the amount you should be budgeting for.

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Five Required Mortgage Closing Costs – And A Few Tips On How To Minimize Them


2015
08.13

Five Required Mortgage Closing Costs And A Few Tips On How To Minimize ThemMortgages are expensive, and closing costs only add to the financial burden that homebuyers face. But with a little knowledge, you can pinpoint places to save on your mortgage closing costs and keep more money in your pocket. When you’re negotiating your next mortgage, use these tips to reduce required closing costs and keep more of your hard-earned money.

Title Insurance: Request The Simultaneous Issue Rate

Title insurance is an important add-on that no buyer should go without. At the time of closing, there may be a variety of title problems that could arise – like encroachments, easements, unpaid liens, and fraud. If a previous property owner wasn’t properly discharged from the title, they may have a claim to the property.

In the event that title ownership challenges arise later on, your title insurance will compensate you for any losses and expenses you incur when trying to prove your ownership. Buying title insurance may help you to avoid the hourly fees you’d pay a lawyer or notary to investigate your title. Typically, when you receive title insurance, you and your lender will each have separate insurance policies on the title.

You can minimize the out-of-pocket expense by asking the insurance provider for their simultaneous issue rate. This is a highly discounted rate that applies when both the borrower and lender title insurance policies are issued at the same time.

Origination Fees: Negotiable If You Have Good Credit

An origination fee is a kind of prepaid interest fee that you surrender to your mortgage broker when you apply for a mortgage. It only applies when you use a mortgage broker.

However, it’s not a mandatory fee for most buyers – even if they go through a broker. The purpose of an origination fee is to compensate the broker for the time and effort they need to invest to get your loan approved. If you have good credit and you can prove your income, then this fee isn’t necessary – and you shouldn’t have any trouble getting your broker to eliminate this fee.

Also note that an origination fee is the same thing as a broker fee. If your agreement includes both, you’re getting charged for the same service twice. Ask for one of them to be removed.

Mortgage Application Fees: Typically A Money Grab

A mortgage application fee is another common fee that you can usually avoid. This fee – which typically runs about $50 or so – is something your lender charges you in order to cover the cost of running your credit report. However, since banks and brokers order hundreds of credit reports every day, they can pull your credit report for next to nothing.

The $50 fee they charge you is, essentially, free money for them – and you can usually get them to drop this fee if you ask.

Underwriting Fees: Your Broker Shouldn’t Charge You For Underwriting

Brokers don’t underwrite loans – lenders do. That means if you’re getting your loan through a broker, you shouldn’t have to pay any kind of underwriting fee – it should already be included in the loan terms the bank set. It’s perfectly valid for a bank to charge you an underwriting fee, but ask your broker to take underwriting fees out of your agreement.

Courier Fees: Handling Documents Should Be A Standard Business Practice

One common closing cost is courier fees. These fees come in different amounts and go by different names. It may be $20 or $50, and it may be called a courier fee or a document handling fee.

Title companies might very well use couriers to send documents, but lenders most likely won’t – and $50 is excessive. Document handling fees are a standard cost of doing business – and that means they should already be included in the lender’s core billed services, not added as an extra fee. Use this argument when you ask your lender to remove the fee – they’ll likely comply.

Buying a house is expensive enough without added fees that merely complicate things. But with a mortgage professional on your side, you can figure out which costs are reasonable and which ones aren’t. Contact a mortgage professional near you to learn more about saving money on closing costs.

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3 Closing Costs That Most Buyers Forget to Factor in and What You Can Expect to Pay


2015
08.06

3 Closing Costs That Most Buyers Forget to Factor in and What You Can Expect to PayIf you’re in the process of buying a home, you probably have your deposit and monthly mortgage charges in a spreadsheet, along with a chart of your other expenses and your monthly income. But when it comes to buying a home, there are lots of different costs that will come into play – and it’s easy to forget something. When you’re preparing to close on your new home, make sure you consider these three closing costs that most buyers forget.

Home Inspection Fees: A Small Charge For Peace Of Mind

Most home purchase agreements are contingent upon a successful home inspection – and if you’re planning to buy a home, you should definitely have it inspected before you buy it. However, home inspectors don’t work for free, and you’ll have to pay a home inspector for a thorough evaluation of the premises.

Home inspection fees depend on the kind of property you’re buying, and can vary depending on your location. For a condo unit, you will typically only need to pay about $250, but a single-family home might cost up to $500. Luxury properties are often more expensive, sometimes even running as high as $1,500.

Private Mortgage Insurance: Obligatory With Small Down Payments

If you’re only planning to make the minimum down payment on your home, you’ll need to buy mortgage insurance. Mortgage insurance protects the lender in the event that you default on your loan. This is an added cost that your lender pays, and in general, almost every lender will pass the cost on to you.

You can pay for your mortgage insurance in one large payment, or you can add it to your monthly mortgage payments. Note that if your down payment is less than 20% of the purchase price, you’re legally required to buy mortgage insurance.

Lender Fees: Additional Fees to Process Your Mortgage

One category of closing costs that buyers often forget is lender fees. Lender fees are fees that your mortgage lender will charge for processing the transaction of the loan. These can include appraisal fees, credit report fees, processing and application fees, and administration fees for underwriting.

These fees can range depending on the lender, but in many cases they exceed $3,000. You’ll want to budget about $3,500 to $5,000 to be safe.

Buying a house is a major undertaking, and there are lots of ways that the process could go awry. But a good mortgage professional can help you navigate the process and get the home and the mortgage you’ve always wanted without any issues. Contact your trusted mortgage expert to learn more.

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3 Reasons Why Your Closing Costs Will Vary Depending on the Type of Home You Buy


2015
07.14

3 Reasons Why Your Closing Costs Will Vary Depending on the Type of Home You BuySavvy home buyers who are preparing to make a real estate purchase should do their research and understand that they need to save money for not only the down payment, but the closing costs as well. The closing costs can account for as much as three to five percent of the sales price in some cases, so this can be a rather sizable amount of money. Some home buyers however, may not realize that the amount of closing costs can vary considerably based on the home that is purchased. With a closer look at why this is, home buyers can make a more educated decision when selecting a home to purchase.

Prepaid Taxes And Insurance

One of the most significant closing costs relates to prepaid taxes and insurance, and both of these expenses are directly tied to the location and value of the property. Consider that the property tax rate can vary based on the city, county, and state. Real estate insurance can also vary based on the type of construction of the home, if the home is located in a flood plain, and other factors. These are only a few examples of how the location and property type can impact these fees, and home buyers should consider the costs assoicated with the tax rates and insurance when selecting a property to purchase.

Third Party Reports

There are several third party reports that are commonly paid for at closing, and these include an appraisal, a survey, a pest inspection and a property inspection. The third party reports may vary in cost based on the size of the home, the amount of land that is being purchased, and even the condition of the property. Those who want to keep their closing costs lower may consider learning more about how these fees are calculated up-front before finalizing their plans to buy a specific home.

Title Insurance Fees

Title insurance fees are another typically sizable expense for home buyers, and this insurance offers protection to the lender if the title is not clean. Title insurance can increase based on the size of the property as well as different factors that are revealed with a title search. This information can be difficult to learn with an initial home search, but home buyers should be aware that title defects can increase closing costs.

The location, size, age and construction of a property all impact the closing costs. Those who are shopping for real estate may be inclined to make a decision that keeps closing costs down, and they can reach out to their knowledgeable mortgage professional for more assistance with their particular situation.

Comments Off on An Insider’s Look at Mortgage Closing Costs and How to Minimize the Amount You’ll Pay

An Insider’s Look at Mortgage Closing Costs and How to Minimize the Amount You’ll Pay


2015
06.16

An Insider's Look at Mortgage Closing Costs and How to Minimize the Amount You'll Pay When buying a new home, you may be focused on finding a mortgage program that has a down payment requirement that is manageable for you. However, some home buyers will overlook the costs that they are responsible for at closing. These costs can vary, but it is common for home buyers to pay between two to three percent of the loan amount in closing costs, if not more. This can be a hefty sum of money that you will need to budget for. The good news is that there are some steps that you can take to keep these costs to a minimum.

Shop For a Title Insurance Company

There are numerous fees that will be listed on your closing statement, but one of the highest fees is the title company charge. The title charges vary from company to company. Most lenders and real estate agents have preferred title companies that they want to work with, but you typically have the ability to shop around and compare the fees. You simply have to inquire what the lender’s or real estate agent’s preferred title company is and what the fees are. Then, you can shop around to find a better deal.

Consider Your Escrows

Another large expense on your closing statement will be the prepaid taxes and insurance as well as the escrows for these amounts. One idea is to ask your lender to waive escrows. This request is not always granted, but it can drastically reduce the amount of money you need to pay for out of your pocket at closing. You can also shop around for a better deal on property insurance to lower your escrow expense.

Ask the Seller to Pay for Closing Costs

While you are ultimately responsible for many of the closing costs, you may be able to structure your sales contract so that the seller pays for some or all of the costs. This is generally something that may be negotiated at the time the original offer is made, but you could also submit a revision request to the contract through your real estate agent.

Understanding what the closing costs are and which costs can be negotiated or shopped around for is important. You can also look at how gifts from the seller or other parties can be used to reduce your out of pocket expenses when buying a new home.