How to Avoid House Closing Costs When You Get a Mortgage

I have to hand it to the Big 800 Pound Gorilla (aka BOFA) for making it seem as if they reinvented the wheel with their No Closing Cost Refinances. The Gorilla has a mighty big Public Relations and marketing budget, because they had every newspaper in town acting like they had come out with something new. Truth is, no closing cost refinances have been done by savvy Lenders for years. It is possible to get better advice, service, and price from the right Mortgage Broker or Banker than you will from the Gorilla – and still not pay house closing costs.

A majority of the public is under the impression that you can get a better deal by going straight to a Bank, than by dealing with a Mortgage Broker or Banker. The reality is that it completely depends on the person you are dealing with. If you have the right Mortgage Broker you can get an excellent deal….even a better deal from the same bank! How could you possibly get a better deal even though you are dealing with a “Middle Man”?? Let me explain….

Until recently the Gorilla, like most every other bank, or mortgage company had two divisions that you can get a mortgage from. One division is their Retail side, which is who you work with when you contact the Bank Directly. The other side is their Wholesale division, which can do as much as 3 times the amount of business as the Retail division, with tremendously less overhead. Think about it – the Retail division has to pay for lots of prime commercial office space, national advertising campaigns, public relations – huge money to keep in the public eye – a huge expense per loan. The Wholesale division, on the other hand only has to let a very small target market know about their services – Mortgage Brokers and Bankers. They can have one office that covers several states or the whole country, so their cost to make loans wholesale vs. retail is substantially less! This is how you can go to a broker and get a better deal than going straight to the Gorilla – but you better make sure you got the RIGHT broker. You know as well as I do, the wrong person (even at the right bank!) can lead you down that frustrating road to pulling your hair out and not getting what you signed up for!

Back for a moment to the issue of no house closing costs. How is this possible? Most of the time people pay house closing costs when they get a mortgage right? Most of the time they do indeed, there are costs that must be paid in order to have a new mortgage close. Appraisals, State Taxes, Title Insurance, etc. Many borrowers do not realize they have a choice in this matter. Most lenders (whether their representatives are aware of it or not) can deliver a no closing cost refinance to a quality borrower. When lenders and banks deliver a long term loan to a borrower and the rate is fixed, the lender earns money depending on what rate is delivered to the borrower at closing.

Lenders and banks typically have the option to raise the interest rate charged in order to receive higher compensation from the end investor in the loan – this money can be used to pay the house closing costs on the borrowers behalf. In Florida, on a typical loan, you could probably accept about .5% higher in your interest rate for the option of having the lender pay all of your house closing costs (even less in other states). This is an excellent strategy for people who do not plan on staying in a property for a long period of time. The other time that it can be good to take advantage of this is when interest rates are declining. If rates decline and you have not paid house closing costs, then there is no reason not to refinance again for no costs (assuming you have no pre-payment penalty). People have done this multiple times over a period of months or years under the right circumstances. Amazingly, not all lenders or mortgage professionals are aware of how to do this.

We have a shoppers guide to selecting the right Mortgage Professional that every consumer should have in their hands before shopping for a loan. Most people make some crucial mistakes in the process that they could well avoid with this information.

house closing costs

Be Prepared for Substantial House Closing Costs

First-time home buyers are sometimes surprised by the many house closing costs. A good Realtor will inform their client that they will pay about 2.5 percent of the price of the home for house closing costs. This amount may be as high as 3 percent or more in some circumstances.

Loan applicants must ask the lender for a Good Faith Estimate (GFE). Responsible lenders normally give you a GFE at the time of application. Regulations oblige lenders to disclose estimated house closing costs and the Annual Percentage Rate within three days of the application. Loan contingencies vary and sometimes small changes will occur after the initial application.

Closing Costs Determined on Your Chosen Financing Option

Lenders propose several options for fees. One option is a “No Cost” loan. These loans are offered at a higher interest rate than traditional loans; basically your house closing costs are included in your loan by the higher rate. Another option long-term buyers prefer is buying your interest rate down through points. Buying a point is one percent of the cost of the loan and typically equals a .125 lower interest rate. Decide your priority. First-time buyers are usually concerned about beginning costs.

Typical Closing Costs Checklist

Generally, a lender will charge an origination fee that can be one percent of your loan amounts as well as a processing fee. Processing fees begin at $350 and go up from there. If you are working with a mortgage broker, there may be bank closing fees too, including an underwriting fee and a doc preparation fee. These fees will generally total between $600 and $900. There are also title fees, title insurance fees, inspection fees and an appraisal fee. Title fees will vary depending on loan amount. Appraisal fees can cost approximately $350 or more. Since all of these fees can vary so much, the GFE is crucial.

Payments for Taxes, Prepaid Interest and Insurance are Deposited in Escrow

To procure financing for your new home, you are required to buy homeowner’s insurance. The first year’s premium will be paid at closing. The lender may require one or two months’ interest at closing as well, since you have about a month of grace before your first mortgage payment is due. The later in the month you close on your home, the less interest you pay at closing. Depending upon the time of year you purchase and what property taxes have already been paid for the year, they will also collect four to nine months of property tax at closing.

Again, in order to prepare for house closing costs, smart buyers refer to their Good Faith Estimate.

house closing costs

New Home Buyers Need to Prepare for House Closing Costs

Many first-time home buyers do not know what to expect at a house closing. You should know that you are going to need more cash than just your down payment. When you submit your application for you loan, your lending institution will give you a Good Faith Estimate which will inform you fairly closely what the house closing costs will be and you can prepare accordingly.

A good way to be prepared for the house closing is to ask for a good faith estimate (GFE) once your application is in. By law, lenders have to tell you what they estimate house closing costs will be, as well as your annual percentage rate (APR) within three days of your applications submission. Subsequent negotiations and adjustments will probably alter the cost slightly after the first application, but you still have a right to know how much it will cost.

First Time Home Buyers May Have Fewer Choices

Most lenders have at least a couple of different options for fee payment. Some institutions offer a “no cost” loan that allows you to purchase a home with little or no out-of-pocket cost, which is attractive to first-time buyers. Be warned that you will have a higher interest rate than the average mortgage borrower. You also have the option to put more money down through buying points and therefore lower your interest rate. Shopping around for the best rate is ideal if you have the leisure time and resources, but many first-time home buyers are more concerned with coming up with house closing costs. Discussing options in detail with your lender will provide you with the most valuable information.

Educate Yourself in the Purchase Process

Lenders may charge a one percent origination fee in addition to a processing fee. This processing fee can range from a few hundred to thousands of dollars. If you are using a mortgage broker, there will also be bank fees. Some of these bank fees include items like an underwriting fee or a “doc prep” fee, and usually runs between $600 and $995. When your lender gives you a GFE, it will have title fees and appraisal costs itemized as well. These fees will vary directly depending on the loan amount, and are usually between $1,000 and $2,000. An appraisal fee starts at $350. With the number of varying factors at play when purchasing a home, getting a GFE from your loan officer is essential to the process.

Tax, Prepaid Interest and Insurance Payments are Placed into an Escrow Account

Financing fees are only one part of the house closing costs. To make sure you get funding for your home purchase, you must have proof of insurance as well as one year’s worth of insurance premiums. In this way you will have secured your investment along with the banks. Tax on your new home and any prorated interest will be tacked onto the house closing costs.

Just to repeat, make sure that you are on top of all the house closing costs, so that there won’t be any embarrassing surprises at your house closing.

house closing costs

How to Estimate Home Building Costs?

There are many factors that go into home building costs and it can be huge task to even come out with an estimate.

The quickest way to estimate home building costs is to find similar houses in the area that has the same overall look and size of one that you want to build. Then take the selling price, minus the cost of the land and you will have a rough and quick estimate of the construction cost. This is, of course not an exact science, but by following this basic rule you will be able to get a rough estimate.

If the house that you are comparing with was built a few years ago, then you should factor in the appreciation cost due to increase in the cost of labor and materials at between 2 to 5% per annum.

Home building costs can be further influence by the interior feature of the home. Let’s say you want a completely furnished basement and the house than you are using as a reference does not. You should factor this into the cost estimate. A little here and there can add up to thousands of dollars.

Another way is to seek the help of a construction company. If you show them the type of house that you are interested in they should be able to respond to you with a quick estimate. Usually, due to expertise and experience, their estimate can be quite close to the actual building cost.

What if the house that you plan to build is different from what is available in your vicinity? Here is a tip. Go online and type in the terms ‘home plans’ or ‘house plans’. You will find many sites that offer thousands of house plans. You can search by type, size, number of rooms etc and for a small price you can download the blueprint. Then ask your friendly construction company to give you an estimate.

Yet another way is to use home building kits. Again go online and type in ‘home building kits’. There are many companies offering home building kits than contains everything (except labor) that you need to build a house. Then ask your construction company to quote for labor charges. Labor charges constitute a significant portion of the cost of building your own home and if you have the expertise, using a home building kit and building it yourself can reduce your estimate significantly.

No matter how precise or detail oriented you are in the planning stages, you must keep in that there may be an unexpected cost overrun. It is a safe practice to put away about 10 or even 15 % for contingency to ensure that you have the money to cover any overrun.

Home building costs can often times be very difficult to pinpoint. But if you use some of the methods described above, and by being precise and detail oriented, you will be able to come up with a very close estimate on your home building costs.

house closing costs

House Closing Costs When Refinancing

The question many of us are asking these days is whether to refinance our mortgage, or wait for better terms or a better rate. While no one can accurately forecast where rates are headed, there are some steps you can take that will help you decide whether to refinance your mortgage now:

First: How much lower are the rates than what you are paying on your existing mortgage? Keeping in mind, especially if you are writing off some mortgage interest on your taxes, that a slight drop in rates may not make it worthwhile to refinance.

Second: If the rate is significantly lower, you may want to check what your monthly savings will be. When doing this, make sure you calculate the new mortgage payment after your refinance without factoring in any years you are adding on to the end. For example, if you owe 27 more years on your current mortgage, calculate your new payment using the new rate and the amount you are refinancing only over 27 years. Otherwise you might think you are lowering your payment more than you actually are, when you are really just adding years onto the end.

Third: So now you know how much you’d save each month on a refinance, but how much are the house closing costs going to be for your refinance? You need to be sure that paying any house closing costs (including points) are worthwhile. Here’s some simple math: If you are paying $2500 in house closing costs, and the reduced rate saves you $500 each year, you’ll need to stay where you are for five years to reap the benefits. For many, house closing costs are worthwhile, but for others who know they will need to upgrade, or have a job situation that can mean having to move, house closing costs may eliminate any benefit of the refinanced mortgage.

Fourth: If you’ve arrived here, you have probably figured that you are saving enough over time to make your new rate and the house closing costs worth moving forward. One last consideration: Do you think you will refinance again? This one may be close to impossible to answer easily, because who knows where rates are going. But, if you think they might go down, make sure you know what your lender’s terms are as far as refinancing. Some lenders will not refinance a mortgage for 90 days after the close of the one you are doing now. Make sure you are getting enough savings to not worry about that.

Fifth, and finally: One last word of caution: Once you lock you may have to pay fees (e.g. for an appraisal) that might not be recoverable if the loan does not go through. One of the biggest issues you could run into is that your appraisal is not high enough to qualify you for the mortgage. You may want to carefully look at comparable sales in your neighborhood, or, even better, talk to someone who is aware of the real estate market in your area, to be sure that your home will be appraised at a high enough value to meet the criteria of your loan.

If you’ve made it this far, you may be inclined to go forward and refinance. Best of luck! Information in this article should not take the place of a conversation with a finance and possible tax professional who is aware of your unique situation.

house closing costs

Preparing to Buy a Home – House Closing Costs

When purchasing a home, one of the first and most important steps you will want to take in beginning of the home-buying process is speaking with a lender. There are many beneficial reasons for doing this.

First, it will ensure you are looking at homes that are in your price range and that work for your budget. Nothing is more disappointing then falling in love with a house that you can’t afford.

Second, the lender can provide a pre-qualification or pre-approval letter, which will give you more bargaining power when submitting your offer to the seller. The owners will see that you are qualified and financially prepared to buy the house and, as a result, the sellers may be willing to accept a lower offer knowing you are financially ready to purchase their home.

Lastly, you will want to find out from your lender how much you should expect to pay in house closing costs. This information will also be given to you in a good faith estimate provided by your mortgage lender.  In addition to house closing costs, you will want to ensure you have earnest money to accompany the contract along with additional funds for any inspections that you choose to have. It is important to know all of the costs involved when purchasing a home so that you are financially prepared.

Working with a lender who is local to the area where you are purchasing the home is always a good idea as opposed to someone in another city or state. The local lender is typically more familiar with the area which can often lead to having a smoother transaction. There are many local mortgage bankers in the Jackson Hole area that have years of experience assisting their clients in purchasing the perfect home.

Once you’ve been pre-approved, you will then want to determine what area or subdivision best fits your needs. A great way to determine this is to take a drive through the different neighborhoods of Jackson Hole with your real estate agent, so that you can see what each area has to offer. For example: It may be important for your children to be close to school or for you or your spouse to be close to work. Once you have determined the price range you need to stay in and what area best fits your needs, have your real estate agent email you listings that match your criteria as soon as they hit the market.

house closing

How to Time the Home Buying Market

Is it safe to buy a house right now?
If you’re like a lot of potential home owners, you may be wondering this too. Here’s how to time the market.

I recently received a newsletter from one of my favorite stock gurus. His name is Alexander Green, Chairman and Investment Director for the Oxford Club, a private investment club. In the newsletter “Real Estate: Why Greenspan Is Right This Time”, Alexander Green comments on remarks made by Alan Greenspan regarding falling home prices. Mr. Greenspan had explained that real estate values might drop even further.

I don’t have credentials like Greenspan and Green whom I greatly respect. I am a mortgage broker by profession. Prior to that, I sold real estate. Before that my husband was a real estate agent. Together we have more than 30 consecutive years in the real estate business and more than 50 years total.

I mention this because I have experienced every type of market and lived to tell about it.

When we first became involved with real estate, we were living in Long Beach, California. It was 1979 and we were in the middle of the Savings and Loan Crisis, a crisis that was just as devastating to the real estate market as the Credit Crunch we are experiencing today.

Here is what I learned. Timing the market can be frustrating and discouraging. But this is a fact. When the media noise is the loudest and fear is the strongest, it probably means we are near the bottom of the housing crisis. I have seen many people try to determine the exact time to buy a house, believing that they could pick the perfect low point in the market. It rarely worked and most of the time they were disappointed.

Here is what I think. In spite of what some professionals claim, the home you live in is not an investment. I tend to follow Robert Kiyosaki’s view in this regard, the author of “Rich Dad Poor Dad”. When he explains in his book that a house is not an asset, he is saying an investment is something that puts money in your pocket. For the most part a home is something that takes money out of your pocket.

However over time, home ownership brings financial stability to a family as long as the mortgage payments are affordable. In addition, if you look at home ownership statistics over a 20 year period instead of a 2 year period, it is almost impossible to lose.

So, here is my recommendation. First stop waiting for the media to tell you it’s okay to buy a house. They don’t know how to time the real estate bottom or the direction of mortgage rates. Truthfully, no one else does either. Even the so-called financial gurus received a surprise by the magnitude of this present crisis.

Second, begin a closer look into your market today. Begin looking for neighborhoods that you would like to live in. Study the prices. Use real estate websites to request notification every time a new listing comes on the market. Many realties now offer this service.

Third, on weekends take a little time to relax by visiting open houses. This can be fun. Talk to real estate agents. Get the lay of the land, so to speak. Familiarize yourself with your market.

Fourth, get pre approved by a mortgage lender. The most important part of buying a home is knowing how much you are qualified to borrow. Don’t wait until you find the house of your dreams to consider what you can afford.

Fifth, save, save, save. One of the most important reasons for mortgage pre approval is to determine how much money you are going to need for down payment and house closing costs. These are important numbers to know before shopping for a home, not after you make an offer. The safest way to eliminate surprises and remain realistic while searching for your new home is mortgage pre approval.

When the housing market is going to turn around is anyone’s guess. No one knows.

However you can count on this. This housing downturn will end. But don’t wait to prepare. The buyers who do their homework now by following these 5 steps will be ready to strike.

Good luck.

House Closing Costs

Don’t Let Buyer’s Remorse Stop You

Buyer’s remorse, in real estate, occurs when your buyer tells you he has changed his mind and no longer wants to purchase your home. Often, the buyer will simply stop returning your calls and refuse to speak to you. Even worse, he may act as if all is well, string you along for weeks, and finally just not show up for the closing.

Usually this issue occurs when the buyer realizes he can not afford your property. Or after signing a contract with you, he may also have continued shopping and found another property he prefers.

Frequent excuses for not closing usually include a job transfer that fell through, unexpected spousal separation, illness of a family member, didn’t like the neighbors when he spoke to them, and a myriad of other things that have gone wrong since he signed your sales contract. Even if his excuse is true, you now face the dilemma of having to resell your home and incur the additional expenses of carrying the property for several months or longer. Even if you are able to rapidly resell your home again, you will have been delayed by at least thirty days and have the loss of carrying your home longer.

Here are some ways to protect yourself from your closing being cancelled:

You should have your mortgage broker pre-qualify the prospective buyer to be certain they can actually afford to buy your home and if they have enough money for closing. The closing cost issue can be overcome by increasing the selling price and giving back the same amount as a seller concession at the closing.

You should make certain that the buyer gets a Good Faith Estimate. Too often, the buyer’s mortgage broker has the buyer sign a blank Good Faith Estimate. The buyer may get a huge surprise, often the day before or the day of closing, when he finds out how much he has to bring to the closing. You have an option, in this case, of reducing your sales price to accommodate the buyer or, even better, you can take back a small second mortgage at the closing to defer a portion of his house closing costs.

The best way to guard against these surprises is to be inquisitive about the buyer’s funding status initially and insert a clause in your sales contract that allows you to get information from the buyer’s mortgage broker regarding the Good Faith Estimate and the status of the loan. You have a lot at stake when you sell your home and this is not too much to ask.

Make certain that your sales contract has a non-refundable escrow deposit clause that encompasses any reason including the buyer’s inability to get financing. Most real estate contracts have a provision for the buyer to get a full refund of their deposit if they are unable to get financing. The second most important part of this sales contract clause should include that any extension of the closing will cost the buyer a given rate per day and for a maximum of fifteen days.

A frequent reason for a cancelled closing is a dramatic change in the buyer’s FICO score. Usually this results from large purchases of furniture or an automobile just prior to closing. Inform the buyer of this possible issue by explaining to him that the lender will re-pull his credit report the day of closing and stop the closing if the buyer’s debt ratio has changed too much. Ways to overcome this problem are credit re-scoring by the lender and quick fixes for your credit report, such as increasing the limits on your existing credit cards to adjust your debt ratios.

Your best protection from surprises is to put appropriate penalty clauses in your contract; have alternative lenders available from your mortgage broker; be open-minded about doing a seller concession at closing; and be willing to consider a small second mortgage to assist with last minute financing shortfalls.

In summary, your best prevention is to proactively keep in touch with all the parties involved in your closing. Of particular importance, and on the front line of issues that “pop up” is your closing agent’s file processor. Make friends with this person so you can call and find out about the progress of the lender, mortgage broker, the buyer and any issues they may be having with the title work. As always, keep yourself informed by keeping open communication with all parties involved in the sale of your home.

house closing costs

Closing on Your New Home

A lot has to happen before you can close on a new home successfully. Some of it is your responsibility, and some of it belongs to others. But don’t expect it to happen overnight or perfectly smoothly. There are too many factors involved. And there’s a lot of money riding on the deal, too—not all of it yours. So the wisest thing to do is take care of everything at your end; dot every “i” and cross every “t” that you can from your end of things. And be picky, picky, picky about who you’re doing business with; from the get-go, choose only the most experienced, successful professionals and companies that you can find. They have what it takes to make the long, complicated process considerably more bearable. For example, if it’s possible, it’s a good idea to go with a Texas-based lender, because of Texas real estate laws, some of which differ from that of some other states. An out-of-state lender might make some mistaken assumptions that could add to delays.

For most homebuyers, pre-qualifying for a home loan and signing a contract are major steps. But that’s just the beginning of the journey towards home ownership. And the rest of the trip can sometimes make or break the deal. It’s during this period that the lender is trying to complete the financial package, the title company is doing the necessary research, surveys and appraisals are put into motion, and the homebuyer orders home inspections and obtain homeowners insurance. Anything that goes wrong at any of these stages could mean delays—or even a broken deal.

As a homebuyer, you need to know that pre-qualifying for a mortgage loan—and actually qualifying for it—are two very different things. You also need to know that the difference between the two can definitely affect the closing date. To get pre-qualified, a homebuyer must meet with the lender and have essential information (Social Security number, income, etc. at hand). Then, after checking your credit score, income, and employment, the mortgage lender writes up a document—based upon this preliminary information—that states what size of loan you might qualify for. Remember, this is not a final conclusion or a mortgage loan approval—it’s really only the lender’s “educated guess”—so don’t start counting your chickens just yet! As a matter of fact, many lenders these days are encouraging homebuyers to skip pre-qualification and go directly to qualification—before they start looking at homes—or, in many cases, even before the contract is signed.

That’s because the actual qualification process is much, much more extensive and in-depth. Typically, it involves giving the lender accurate information, W2 forms, bank statements, tax returns, and proof of income. All this goes through the lender’s approval process, which can take a fair amount of time. That’s because the up-to-date accuracy of the information you’ve given them is checked and double-checked at this time. So be sure of your facts and figures, because any errors, inconsistencies, credit problems, or misinformation could definitely put a damper on things at this point.

Things a homebuyer should know. Or expect. Or do.

* Lenders should give buyers a good-faith estimate of how much money to bring in—by certified check—to the closing. Closing costs typically run about 3 to 6 percent of the loan amount.

* One business day before closing, you have the right to inspect the Uniform Settlement Statement. This itemizes the costs of all services you must pay at closing.

* The lender is also responsible for giving you a truth-in-lending statement that states all the details about the cost of the loan.

* The title company’s job is to research public records and verify that the buyer and the seller don’t have any lawsuits, liens, or judgments against them or the property.

* One of the real estate agent’s jobs is to stay in contact with the title company during the research phase, just to make sure that any problems that might surface are dealt with promptly. It’s important to avoid last-minute surprises, which could lead to delays on closing.

* Before closing, the smart homebuyer should order inspections on the house and property to make sure that everything is in good shape and that no major repairs are required. Repairs could change the agreed-upon price in the contract. The homebuyer should be there with the inspector when it’s done. Why? Because an inspector’s report can be 10-12 pages long and full of technical jargon, so being there to ask questions and get on-the-spot explanations can really help you get a grip on the situation. The cost of an inspection can vary; it depends on the location of the house, the size of the house, and what kind of foundation it has. By the way, a termite inspection also needs to be ordered by the homebuyer before the closing. If an inspector is not certified in this area, another inspector will have to be hired.

* Homebuyers are responsible for getting homeowners insurance and have proof of it at closing. The Texas Department of Insurance says buyers should expect to pay about $400 to $1,000 a year for insurance—and possibly even more if the home is in a flood zone. Most lenders will recommend an escrow account where funds for insurance and property taxes are automatically set aside each month.

* The lender will require hazard and liability insurance for at least the amount of the loan. At the closing, you’ll be expected to pay the first year’s premium for this insurance.

* The homebuyer should schedule a final walk-through of the house right before the closing. It would be a good idea to do the walk-through with your real estate agent. You want to make sure that the house is in the condition that you agreed upon in the contract. Remember, once the closing is done, you’re the owner of the house—as is. You no longer have any legal power to get the seller to fix anything, and the seller no longer has any legal responsibility to do so.

* A settlement agent—usually the title insurance company—is the one who usually sets the time and place of closing.

house closing costs

House Closing Costs – What to Expect

Don’t just assume that the price of a home that you agree on with a seller is the end of the road as far as costs! Like so many other purchases, buying a home will mean that there are additional costs associated outside of the actual retail price. These are usually due at the end of the buying process, before a deal is struck with the lending company, and are known as “house closing costs”. Here are a few of the most typical.

Points

Points are equal to one percent of the total amount of a loan. If you buy a home worth $300,000, then one point would be $3,000. The decision to buy points is made right before the mortgage is closed, as the number of points you opt for will directly affect the amount of money you pay each month for the mortgage.

There are two types of points, discount and origination fees. Origination fees are charged by the lender in order to cover the cost of the loan. Discount points are prepaid interest amounts and will reduce the dollar amount you pay each month on the interest on your loan, and therefore your total payment amount.

Home Insurance

If a house is destroyed by fire or act of God, the mortgage company stands to lose the most; after all, the money is still owed to them and with no way to recover the loan through the sale of the home they will take the hit. For that reason, lenders will insist that you purchase home insurance before they approve the mortgage. This insurance must be renewed each year according to almost all contracts.

Title Insurance

Every once in a while a home owner and their mortgage lender will get a nasty surprise in the form of another person with a lien on the property. In effect this person claims that the property is theirs, and that the person who sold it to the buyer had no right to do so. Title insurance, like home insurance, will mean that both the lender and the buyer are protected against undisclosed liens.

Surveys and Inspections

Lenders will also typically request an inspection of the home and/or a survey of the property in order to ensure that everything is still within the original boundaries. Appraisal fees, to determine if the property has been valued appropriately (directly related to recovery in the event of a resale) are also an added cost.

So as you can see, when looking to purchase a new home, you must also consider the additional costs associated with the purchase.

house closing costs

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