Things To Consider Before Buying A Home
Documents Needed for Loan Applications
Dos & Don'ts
How Your Credit Score Is Derived
Keep Your Credit Clean
What To Expect At Closing
Moving
Checklist
You need Real Estate & mortgage professional you can trust. You need a company
that values honesty and integrity throughout the entire organization. You need top
planning specialists who give you their best consistently. You need to find strength,
stability and opportunity—especially now. You need New Century Realty & Lending!
When dealing with your real estate home financing, we are not only working with
one of your largest personal financial investments; we also are handling one of
your biggest dreams. Since we work with matters so close to the heart, we serve
you from ours.
New Century Realty & Lending can meet you where you are and help you where you are
going. Let us provide you a professional service without obstacles.
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Out of the entire home buying process, closing costs can often the least understood
pieces. At New Century Realty & Lending, we will take the time to address your questions
and guide you to answers.
Closing Costs
Although they tend to vary from lender to lender, closing costs generally are considered
any costs tied to the purchases of a new home. Today, these costs range from 2 and
7 percent of the home’s purchase price and include three basic categories:
Prepaid Expenses
Prepaid expenses include homeowner’s insurance, mortgage insurance and the costs
to set up an escrow account. An escrow account is when a lender will pay the annual
insurance premiums and various taxes on the borrower’s behalf. The amount that goes
into this account is based on the first year’s premiums; an additional amount also
is included to pay for future premiums. Because they vary based on the type of property
and the time of the closing, prepaid expenses are difficult to determine.
Mortgage Points
A mortgage point is equal to 1 percent of the mortgage loan amount and actually
helps reduce the loan’s interest rate. For example, depending on prevailing rates,
a $100,000 mortgage might be obtained at 7.75 percent with 2 points, or at 8.25
percent with no points. Obtaining the lower interest rate would cut the mortgage
payment by about $35 a month, but would require $2,000 — or 2 points — up front
at closing.
Out-Of-Pocket Expenses
Fees for appraisals, attorneys, credit reports, deed recording, tax services and
other miscellaneous expenses make up the out-of-pocket expenses. Usually performed
by a third party, these fees for services are directly charged to the borrower.
The majority of out-of-pocket fees are necessary and legitimate; however, if the
borrower encounters a fee that causes confusion, he or she should ask the mortgage
professional about it.
Purchasing a home is one of the largest financial investments you can make. It’s
vital that you understand it fully and completely so that you avoid unwelcomed surprises
and are confident in every step you take towards your new home.
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