It is really important to know the process for a mortgage, which should be start before looking at a home. Also, it will show you how much you can afford for your new home.
Your Credit History – How is your current credit score? We have to know, the better credit score is the better mortgage rate. The Lander’s down payment requirements as well as the rates are very much depending on your credit score.
- Why Down Payment? – Your loan type such as adjustable, fixed rate, Conventional, VA, or FHA loan is determining the down payment requirements.
- My Closing Cost– It is common for a variety of costs associated with the transaction to be incurred by either the buyer or the seller. Following costs are typically paid at the closing, and are known as closing costs: Typical closing costs are:
- Attorney Fee: Paid by either or both parties, for the preparation and recording of official documents. Typically required to ensure documents are prepared correctly.
- Title Service Cost: Paid by either party according to the contract but by default seller mostly pays for title search, title insurance, and possibly other title services. If the attorney will do the title search or the title service, attorney fees may be combined.
- Recording Feed: Paid by either party, charged by a governmental entity for entering an official record in order to change the ownership of the property. It requires by the government for recording the deed.
- Document or Transaction Stamps or Taxes: Paid by either or both parties depending on the location. It will charge by a governmental entity as an excise tax upon the transaction.
- Survey Fee: It is for a survey of the lot or land and all structures on it, paid by either party, to confirm lot size and dimensions and check for encroachments.
- Brokerage Commission: Paid by the seller to a Real Estate Brokers, to compensate the Broker(s) involved in the sale for their services.
- Mortgage Application Fees: This will be paid by the buyer to the lender, to covert the costs of processing their loan application.
- Points: Paid by the Barrower to the lender. Points are a form of pre-paid interest, charged by the lenders as an alternative to charging a higher rate of interest on the mortgage loan. One point equals one percent of the loan principal, and usually reduces the interest rate by 1/8% (0.125).
- Appraisal Fee: This fee is usually paid by the Buyer but it is up to the negotiation between buyer and seller, charged by a licensed professional appraiser.
- Inspection Fee: This fee is usually paid by the Buyer occasionally by the seller, charged by licensed home, pest, or other inspectors.
- Home Warranties: Paid by either the buyer or the seller. Warranties are available on resale homes insuring major household systems.
- Pre-paid Property Insurance: Paid by the Buyer but may be reimbursed by the seller. Lenders will typically require that a mortgaged property be insured at all times throughout the life of the mortgage, and will usually require that the first full year’s property insurance premium be paid in advance by the buyer. If the buyer has not already paid the insurance company directly, this would become another closing cost payable at closing.
- Pro-rata property taxes: Paid by the seller, the buyer, or both.
- Pro-rata Homeowner Association Dues: paid by the Seller, Buyer, or both.
- Pro-rata Interest: paid by the Buyer but may be reimbursed by the Seller.
How much is the monthly payment? It is very depending on the total mortgage amount. But, the other important thing which you should also consider, your HOA, tax, and insurance payments. Some of those expenses would be included in your monthly mortgage payments like taxes and insurance. Therefore, we should consider affording the cost to buy a home and the monthly payments in total. If you want a favor yourself, contact with your mortgage professional. If you don’t know anybody on the financing side, we have a trusted financing professional ready to assist you…
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