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

September 13, 2016 Leave a comment

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

August 25, 2016 Comments off

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.

4 Ways to Help Your Mortgage Transaction Close On Time

July 8, 2016 Comments off

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.y want to

Yes, It’s True: Mortgage Closing Costs Are Down. Here’s How You Can Take Advantage

December 10, 2015 Comments off

Yes, It's True: Mortgage Closing Costs Are Down. Here's How You Can Take AdvantageMortgage closing costs have been coming down in recent years, which is good news for buyers. But if you’re buying a home in the near future, you’ll want to ensure you’re prepared to take full advantage of these lower fees – after all, keeping more money in your pocket is always good. When you close on your mortgage, take these three steps and you’ll find that you’ll pay far less in closing fees than most buyers would.

Ask The Seller To Pay Some Of The Closing Costs

In most situations, the buyer is responsible for paying all closing costs – that’s the industry standard agreement. But just because that’s what generally happens most of the time, that doesn’t mean you need to pay all the closing costs on your new home.

Negotiate with the sellers to see if they’d be willing to cover some of the closing costs. If you want to make a deal like this, though, you’ll want to add an extra incentive for the sellers to agree to it. Tell the sellers that they can choose any closing date they wish, or offer to accept the home “as-is” rather than requesting repairs.

Use The Money You Save For An Extra Annual Payment

With lower closing costs come savings that you can either pocket or spend. One great way to leverage lower closing costs is to use the amount of money you saved with reduced closing fees as an extra mortgage payment.

Most lenders will allow you to make one extra lump sum payment per year, without penalty – and by making this extra payment every year, you’ll save on interest payments. So use the money you saved in closing costs as part of an extra payment to reduce your debt load.

Reducing your closing costs and taking advantage of the lower fees is easy if you know what you’re doing. A mortgage advisor can help you to understand what closing fees are negoitable and how you can budget for success. Call your trusted mortgage professional today to learn more.

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

December 3, 2015 Comments off

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.

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

October 14, 2015 Comments off

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.

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

September 15, 2015 Comments off

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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