Sunday, December 17, 2017

Closing Costs Breakdown for Home Buyers and Home Sellers


If you are buying or selling a home, you will have to pay closing costs. Closing cost typically range between 2 and 6% of the sales price of the house, but vary greatly depending on the sales price, location of the property, loan type, and lenders fees. The following list of fees are standard costs associated when buying or selling a house.

Application Fee - This is usually the only fee that you will pay upfront when applying for a mortgage. Typically, it covers the cost of the credit report fee and appraisal.

Appraisal - This is paid to the appraisal company to verify the condition and fair market value of the home.

Appraisal Re-Inspection Fee - The appraisal fee pays for a professional appraiser to visit a home, evaluate the condition and features, and provide an estimate of the market value. If any repairs are cited, they will typically have to be completed and re-inspected by the appraiser prior to closing.

Attorney Fee - The fee for an attorney to review the closing documents on behalf of the buyer or seller.

Closing Fee/Escrow Fee/ Settlement Fee - This is paid to the title company, escrow company, or attorney for conducting the closing.

Courier/Overnight Fee - This covers the cost of transporting documents to complete the loan transaction.

Credit Report - A tri-merge credit report is used to review your credit history and credit scores.

Discount Fees or Points - Additional costs charged to buy the interest rate down.

Escrow Deposit for Property Taxes & Mortgage Insurance - Funds placed in your escrow account to ensure enough funds are available to pay future property tax, home owners insurance, and private mortgage insurance bills.

FHA Up-Front Mortgage Insurance Premium - If you are applying for an FHA loan, you'll be required to pay the upfront MIP of 1.75% of the base loan amount. This expense is typically rolled into your mortgage.

Flood Determination - This is paid to a third party to determine if the property is located in a flood zone. If the property is found to be located within a flood zone, you will need to purchase flood insurance.

Home Inspection - Private inspection to determine condition of property.

Homeowners' Insurance - This covers possible damages to your home. Your first year's insurance is often paid at closing.

Home Warranty - This is a one year insurance policy on the appliances and/or electrical, heating, and plumbing systems in the house.

Lender's Policy Title Insurance - This is insurance to assure the lender that you own the home and the lender's mortgage is a valid lien. It also protects the lender if there is a problem with the title.

Lead-Based Paint Inspection - May be required to determine if lead-based paint is present in property.

Lock in Fee - A fee charged by the lender to protect the interest rate during the processing and underwriting phase of the loan process.

Owner's Policy Title Insurance - This is an insurance policy that protects you in the event someone challenges your ownership of the home. Many lending institutions require this protection.

Origination Fee - This is a fee charged by some mortgage lenders and covers part of the lender's costs. It's usually about 1 percent of the total loan amount, but is negotiable.

Pest Inspection - This fee covers the cost to inspect for termites.

Prepaid Interest - Most lenders will ask you to prepay any interest that will accrue between closing and the date of your first mortgage payment.

Private Mortgage Insurance (PMI) - If your down payment is less than 20% of the home's purchase price, you will likely be required to pay PMI.

Processing Fee - A lender fee used to cover overhead costs.

Property Tax - Lenders unusually require any taxes due within 60 days of the purchase to be paid at closing.

Recording Fees - A fee charged by your local county recording office for the recording of public land records.

Survey Fee - This service verifies that there are no encroachments on the property you are purchasing.

Title Insurance Policy - The Loan Policy is usually based on the dollar amount of the loan and it protects the lender's interests in the property should a problem with the title arise.

Title Search - An investigation into the origin and validity of a title to a property.

Title Exam Fee - This fee is paid to search the property's records. The title company researches the deed to your new home, ensuring that no one else has a claim to the property.

Transfer Taxes - This is the tax paid when the title transfers from seller to buyer. Underwriting Fee - This is a fee that your lender may charge to cover the cost of underwriting your mortgage file.

VA Funding Fee - If you have a VA loan, you may be required to pay a VA funding fee at closing (or you can roll this fee into the loan if you prefer). This is a percentage of the loan amount that the VA assesses to fund the VA home loan program, however disabled veterans are exempt from this fee.

Most loan types allow the seller to pay a percent of the sales price towards the buyers closing costs. FHA mortgages allow the seller to pay up to 6%, conventional loans allow the seller to pay between 2 to 6% of the sales price toward buyers closing costs, and for VA loans the seller is typically allowed to pay all of the buyers closing costs.

Your mortgage lender is required to provide you with a disclosure called a "Loan Estimate" which is a detailed list of the closing costs, down payment, and total costs needed to close your mortgage. Many of the fees listed on the loan estimate can change as much as 10% of the amount listed, unless your loan program changes. If an unforeseen event occurs and the mortgage program changes in order to close your loan, you should receive a form called a "Change of Circumstance" which provides a detailed list of any changes and discloses your new fees. After you receive your final approval, your lender will email you a form called the "Closing Disclosure" at least 3 days prior to your actual closing date. After receiving your closing disclosure, you should compare the fees listed to your initial loan estimate and/or change of circumstance disclosure to verify that your fees have not changed more than the 10% allotted variance.

Article Source: http://EzineArticles.com/expert/Michael_Zuren_PhD./1966583

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Thursday, December 14, 2017

The Mortgage Process Explained


Purchasing a home can be a frustrating and intimidating process. The best way that you can prepare for the purchase of your next home is to know what is required of you and what is happening during your home buying journey. Although, your lender will be the best source to explain the current status of your mortgage, the following is an overview of the stages of the mortgage process.

• Preparation and Pre-approval - The first thing that you should do prior to starting your search for a new home is to find a respectable and knowledgeable lender and to apply for a fully underwritten pre-approval. To obtain a full pre-approval, you will need to provide the lender with the following: proof of income, employment, and source of down payment. This information will allow the lender to determine your maximum buying power and which loan types you qualify for.

• Home Search - After you are pre-approved, you should provide a copy of your pre-approval letter to your real estate agent. When you find a house and your real estate agent presents an offer, the seller and listing agent of the property will likely require a copy of the pre-approval letter for the offer to be considered.

• Loan Application - Once you have a fully signed purchase agreement, you can officially make loan application on the property you are purchasing. You may need updated pay stubs and bank statements for your lender. At this time your lender will likely order the appraisal and title work for the property.

• Underwriting - Once the appraisal and title work has been completed, your mortgage should be submitted to the underwriting department for final approval. If any additional documentation or explanations are needed, they will be requested after the loan has been underwritten. You may receive a conditional approval letter, which outlines the items needed before the loan can close. Avoid new debt, derogatory credit, and changing employment during this stage. If any of these things happen, contact your lender immediately.

• Closing - After you have provided the documentation to clear any approval conditions. You should receive your final approval letter. Your lender will contact the title company to set the closing date for your mortgage. You should receive the closing disclosure three days prior to signing your final papers. Thoroughly compare your closing disclosure to your loan estimate, which you would have received when you made loan application. If there are any discrepancies in fees, contact your lender for an explanation. When you meet with the closing agent to sign your final papers, the mortgage and ownership of the house should transfer by the next business day.

Patience and understanding is needed when purchasing a house and obtaining a mortgage. Stay in contact with your lender and your real estate agent to find out what is going on, and what is needed to keep the process moving forward. Having a greater understanding of what is going on during your home buying process will limit frustration and the potential for the mortgage to be denied. Using experienced and trusted real estate and mortgage professionals should decrease possible delays and make the process smoother.

Article Source: http://EzineArticles.com/expert/Michael_Zuren_PhD./1966583

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Monday, December 11, 2017

Why Buying a Home Is a Great Investment For Millennials


Buying a home is a great investment for millennials. Being in your early 20's and thinking about buying a home may scare you, but it's actually a great way to get started investing. Here are the top reasons to buy a home as your first investment.

#1 Mortgages are Cheaper than Rent

In 42 out of the 50 states, it's cheaper to own a home than to rent. Taking on a mortgage can actually save you money now and in the future. The biggest thing standing in most people's way is the down payment. Luckily, depending on what state you live in, there are many programs that will help first-time homeowners purchase a home for a lower down payment.

#2 Start Building Equity

As you start to pay down your mortgage, the amount of equity you have in your home grows. Unlike rent, you're not just throwing away your money, but securing it to your home. When you're ready to move you can use that equity to buy your next home.

#3 Your Lower Budget is in your Favor

When buying your first home, odds are you won't be able to buy the nicest home on the block. Go for the fixer upper that you can actually afford. Over the years take the time to make improvements to the home and when you're ready to sell, you'll be making money

#4 It's an Investing Stepping Stone

Buying a home is one of the best stepping stones to get started investing. Buying a home, paying your mortgage, building equity, and selling for more than you bought it for is a great way to learn how investing works. You invest in something while it is low, wait for it to grow in equity, then sell when it is high. This is exactly how homeownership works. If you make enough money on the sale of your first home you can even invest some of that into other types of investments such as stocks, bonds, retirement accounts, or more real estate.

Buying a home is a big decision, but as long as you make your payments on time and let your equity grow, it's one of the best investments you can make... especially in your 20s. Investing is all about risk, start off with a small but beneficial risk of buying a home and see how it can help guide you towards a future of great investments

Article Source: http://EzineArticles.com/expert/Angela_M_Gregg/1548952

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Friday, December 8, 2017

Before You Purchase Your New Home


Before you start searching for your next house, these following tips will help you decide on what features you need in a home, help you prepare to move, and get your finances in order. Remember to take your time when looking for your next home. If you need a mortgage for your next purchase, finding the best program will involve some research and many questions to figure out your best option. There are countless mortgage options and down payment assistance programs available. Once you have your mortgage financing in order, determining the best location, features, and price range of your new home will take patience and the help of a devoted real estate agent.

Before you look at your first house, you should review your credit report and check it for inaccuracies. Once per year, you can get a free copy of your credit report at: annualcreditreport.com. Before you contact a bank or mortgage company, review the report and clean up any past issues and make sure there are no inaccuracies or mistakes. To qualify for a mortgage, you will need to meet the minimum credit qualification standards.

If you are a first-time buyer or have had credit issues in the past, it is a good idea to talk to your family and friends and ask them to refer a mortgage professional that they have had a good experience with when they applied for a mortgage. To apply for a mortgage, you will need at a minimum the following documentation: pay stubs, bank statements, tax returns, and other personal information. If possible, try and meet your loan officer face to face. This will give you peace of mind and reduce stress. If you are concerned your mortgage could be denied, be sure that you apply for a fully underwritten mortgage pre-approval. A pre-approval will take longer to complete than a pre-qualification, but it will eliminate unforeseen issues such as: employment history verification, residencies history questions, verified funds, past credit issues, and other potential problems. During the pre-approval process, your loan officer should thoroughly review any mortgage programs and down payment options that may benefit you.

Once your pre-approved for a mortgage. Review your budget and determine the maximum monthly mortgage payment that you are comfortable with and the total funds you have available to purchase your new house. When buying a house, remember to include all expenses, such as: upfront costs (appraisal fee, insurance, warranties, and inspections), down payment, closing costs, and moving expenses. Both the real estate agent and mortgage loan officer should be able to give you an itemized estimate of the likely expenses associated with purchasing your new home. Next determine, what features you need and want in a house and what cities would be the most desirable to you and your family?There may be many well maintained and affordable homes available in your search area that have the features you are looking for. Make sure you prioritize your desired features. You may not be able to get everything on your wish list, but knowing what your requirements are before you get started will make your search easier.

Once again, you should talk to your family and friends and ask them to refer a licensed real estate professional that they have used in the past. You may spend a lot of time discussing home options and looking at potential houses with your real estate agent, so it is important to be able to rely and trust their opinion and expertise. Knowledgeable real estate agents should be able to listen to your wants and needs in a house; then be able to honestly tell you what you can afford and the areas you can find the most house for your budget.

Article Source: http://EzineArticles.com/expert/Michael_Zuren_PhD./1966583

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Saturday, December 2, 2017

How Prepared Are You To Buy A House? 5 Fail-Safe Tips To Get You Ready


Has the thought of buying a house ever entered your mind? Renting may be a good option as a start but once you begin growing a family, then it is time to think about the future and giving your family more security and a safe place to live in. It cannot be denied that your children can be a major influence on your decision to favor home ownership.

If you haven't realized it yet, here's what home ownership can give you:

  • Privacy and more freedom to do what you want in your own home. Upgrading your home for instance can add up to its value which you can benefit in the long run.
  • Homes do appreciate in value and can provide a reserve fund for you in the future.
  • Of course, there is always that great feeling of achievement.

But how prepared are you to buy a home? The idea can be too overwhelming but the process is not as easy as you think. It needs commitment, preparedness and better judgment. Let's outline the important aspects of the home buying process:

Financial Preparedness - As mentioned earlier, buying a home is a long term commitment. You can look forward to years of paying the monthly mortgage, the cost it takes and all. While on a search, make a checklist of all the must-haves you want in a home. Scout through open houses. Do they fall within your budget? What particular home meets your family's needs? How about your lifestyle? Is it in a perfectly good and desirable location with close proximity to schools, transportation, shopping and more? Typically, you will be required to make a down payment of at least 20% of the purchase price of the house. With these things in consideration, you will somehow get the idea of how much money you need for your home saving plan.

Mortgage Pre-Approval - This is where you will need to obtain the financing you need for your home. A pre-approval is where the lender asks in detail about your financial information to determine if you are qualified for a home loan and for the maximum loan amount you can get. The criteria will be based on your credit score, income, debt ratios, etc. Once you get pre-approved, you can then have a better chance of finding the right home that is within your parameters.

Find A Trusted Realtor - A trusted realtor is someone that has years of established reputation and known to provide only the best and quality real estate service. Take advantage of this expertise to get the best possible home deal you can have.

Negotiation - This is where you realtor presents an offer to the seller after you have decided on a home. The offer will be on the ground of the amount you can afford and what the house is worth. In this case, a home inspection prior to negotiation can be beneficial to establish the real value of the house based on its condition, defects, repairs and upgrades. If the seller decides to accept the offer, a date for the closing will be set.

Closing Process - This is where the sale of the home gets finalized. You can make a walk-through inspection of the house at least a day before closing to ensure that its condition is what clearly describes in your sales contract. At the closing, all paperwork is completed and any closing costs or legal fees are settled. The title of the property is then transferred from the seller to the buyer.

There can be no greater achievement than having a place you can call your own. Preparedness is very important in making the right choices later. Having a good realtor on your side will ease up the process even more, to safeguard your interests and make certain you are on the right track.

 Article Source: http://EzineArticles.com/expert/Tom_Laffey/2471538

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Wednesday, November 29, 2017

Optimism of the Stock Market Moving Higher Continues; Housing Inventory Drought May Finally Be Easing


Stock Markets:

The upward trajectory of the stock market continues. With the Indices sitting at, or near record highs, optimism on the market moving even higher continues. Investors are very excited about the President’s proposed tax plan, which if passed, would put a lot of money back into corporate profits. There continues to be a lot of wrangling in Congress over the plan, and more than likely the plan will change from its current form in order for it to pass. However, optimism exists that after decades of no significant tax changes, there is a chance for some reform to actually be implemented.

Existing Home Sales:

Next week there are 3 major real estate reports due for release. FHFA House Price Index, Corelogic Case-Shiller Home Price Index, and the Pending Home Sales Report. When you combine this forthcoming data with this week’s existing home sales numbers, we will have a very clear picture on the status of the housing market in this country.

Existing home sales were stronger than expected for the month of October. Increasing by 2.0 percent, this continues to show the stability in the housing market despite the minimal inventory available in many parts of the country. However, in recent weeks, many real estate professionals have been reporting an uptick in available properties for sale which means the inventory drought may finally be beginning to ease and more balance between sellers and demand may be occurring.

Mortgage Rates and Applications:

Purchase applications rose a seasonally adjusted 5.0 percent for the week ending November 17th. Refinance applications declined by the same 5.0 percent. The slight rise in interest rates over the last week might explain why refinances declined. Real estate professionals have been hard pressed to explain why there was a rise in purchase activity the week before Thanksgiving, but every one of them was grateful for the positive movement in purchase activity. The previously mentioned increase in housing inventory could be the explanation for the purchase jump. Home purchases are up 4.0 percent from the same time last year.

Next week’s potential market moving reports are:

· Monday November 27th – New Home Sales
· Tuesday November 28th – FHFA House Price Index, Corelogic Case-Shiller HPI
· Wednesday November 29th - MBA Mortgage Applications, Pending Home Sales
· Thursday November 30th – First Time Jobless Claims
· Friday December 1st – ISM Manufacturing Survey, Construction Spending

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can. Please feel free to reach me at (707) 455-7070.