Wednesday, July 26, 2006
Mortgage Closing Costs will Cost You!
One mistake that many new home buyers forget to do is budget for the one-time closing costs. In an typical home purchase, closing costs amount to about 2-5 percent of the price of the property. These closing costs are in addition to your down payment.
Here is a list of some of the closing costs you can expect to pay on your new home.
1. Loan fees and Charges:
Your lender will charge you for all types of things such as: appraising the property, preparing loan documents, obtaining a copy of your credit report, and processing your loan. You may also be charged a fee for 1 to 2 percent of the loan for prepaid interest charges called Points. Warning: if you have to pay "points" on your mortgage, this will cost you thousands of dollars.
2. Escrow Fees:
These costs cover the preparation and transmission of all the money and documents related to the purchase of your home. The escrow fees will cost you anywhere from several hundred to over a thousand dollars.
3.Title Insurance:
This insurance protects you and the lender against the risk that the person selling the home does not legally own it. Luckily you only have to pay the premium on this insurance one time. This insurance should cost you between three hundred to a thousnad dollars depending on the value of your home.
4. Homeowner's Insurance:
Most lenders will require that you pay the first year premium on your home owners insurance at the time of closing.
5. Property Taxes:
If the sellers of the home have paid any property taxes in advance, you may have to reimburse them. For example, the closing date on your home is Nov 1 and the sellers have already paid the taxes on the home until the end of the year, you would have to reimburse them for the taxes they paid from Nov 1 until Dec 31.
6 Property Inspections:
Although it is not absolutely required to have your property inspected, it is highly recommended that you do so. You certainly do not want any surprises after you move into your new home. This inspection should cost you anywhere between two to four hundred dollars.
7. Private mortgage Insurance (PMI)
If you make a down-payment of less than 20% of the purchase price of your home, your lender will probably require you to take out Private Mortgage Insurance. This insurance will protect the lender in case you default on your mortgage. This should cost you a minimum of several hundred dollars. This insurance will be a yearly cost until you have 20% equity in your home.
8. Prepaid Loan Interest:
At the closing, the lender will charge you interest on your mortgage to cover the interest that accrues from the day the loan is funded up to the day your first mortgage payment is due. This interest payment will vary depending on the size of your mortgage. The sooner you make your first mortgage payment the less interest you will have to pay.
9. Miscellaneous Fees:
By now you are probably thinking that your mortgage lender has already charged you for everything but the kitchen sink. But wait there are a few more little pesky items to throw in.
We don't want to forget the fees to record your mortgage and deeds at the county courthouse, the Notary Fees, or the express mailing or courier fees. These little fees should cost you another $100-$200.
If you cannot afford to pay all of your closing cost fees, speak to your lender as he/she will probably allow you to finance these charges. It is now common to roll the closing costs into into your monthly mortgage payments.
A couple great online sources for mortgages are:
Ameriquest Mortgage (Click Here)
About to Purchase a New Home Up to 4 free quotes now! (CLICK HERE)
Until Next Time!
Jasmine
www.pickamortgage.blogspot.com
G!BnM~%24(KGrHqV,!iEE)qn4LlwJBMkCRhM3cw~~_1.jpg)