This renovated ranch home is much larger than it looks. Two newer Air Conditioners added and a newer furnace added as well. All new flooring Luxury Vinyl tile and carpet. The huge family room is open to the kitchen and adjoining enclosed patio. Newer windows and slider. All interior doors are new and most others as well. All the bedrooms have large closets. The master bedroom is huge with sitting area. Newer LED lighting and electrical panel. Large 2 car garage.
Carefully Assess Each Fee
Buying a home and obtaining a mortgage can be overwhelming. There are forms to sign and a multitude of fees involved. While closing costs vary by state, some of the costs may be disputable or negotiable.
Some nebulous charges or fees that are commonly associated with mortgage loans are often referred to as junk fees or garbage fees. For example, a lender may present you with a low percentage rate offer that has an extraordinary amount of junk fees. If you don’t understand what fees are and mean, then you may be taking a loan that isn’t the best option for you.
It’s of the utmost importance that you work with a reputable loan officer. You may want to ask for previous client recommendations and check the Internet for any negative information associated with the lender.
Within three days of applying for the loan, your lender should give you a good faith estimate. From the good faith estimate, you will know what your APR (annual percentage rate) will be. You will want to find out what costs have been included in the APR, especially if it seems abnormally high. A good faith estimate is essentially a listing of the closing costs that will be needed to secure the loan. You should carefully assess each item for validity, while also attempting to negotiate better terms on other items.
Here are 13 of the most common fees in a good faith estimate:
1. Loan Origination Fee – Most mortgage brokers and lenders have some sort of loan origination fee. It may be included in the APR or a separate title. The amount often varies based on how much work the lender/broker did to secure your financing. For example, those with exemplary credit may have a lower origination fee because the lender didn’t have to do as much work to secure their loan. On the other hand, a broker/lender trying to secure financing for someone with questionable or low credit will usually work much harder to secure a loan.
2. Application Fee – A usually upfront fee that covers the cost of appraisal and pulling your credit report. Some lenders will refund this fee in the event your application is denied. This fee will vary per lender, but it shouldn’t seem unreasonable.
3. Attorney Fees – Your attorney will usually represent you during the mortgage process, notarize the documents involved in the closing, record necessary information with the county, and possibly facilitate the actual closing. The attorney fees pay for those services and any amount due to other parties involved.
4. Document Preparation Fees – The charge for document preparation may be separate or included under the application fee or attorney fee. Just check to make sure the fee isn’t imposed under more than one title.
5. Processing Fee – This is often a camouflaged way of charging another loan origination fee to cover the incurred overhead costs of the lender.
6. Discount Points – You will pay for points (a fee equal to one percent of the loan amount) upfront. You’re actually prepaying interest on the loan, thereby getting a lower interest rate in return. One point on a $200,000 mortgage would cost you $2,000 dollars. Points may be a prudent route if the mortgage will be paid over a long period of time. This is another fee commonly found under the APR.
7. Mortgage Insurance – Lenders may require anyone not putting at least 20 percent down to purchase mortgage insurance. The fee will usually be paid in full at closing or annually from an escrow account. It too may be one of those fees included in the APR.
8. Escrow Account – Think of this fee as a forced savings account of sorts. The account serves as a middleman between you and the county for property taxes, you and the homeowner’s insurance company for premiums, and so forth. The money, which is a portion of your total mortgage payment, is held by the lender in the escrow account until the payment is due. This is a way that the bank can ensure that bills related to the mortgage are paid.
9. Pre-Paid Interest – It’s usually best to schedule the closing date for the end of any given month. Gaps between the date of closing and when the mortgage loan payment is due at the first of the month may leave you paying the amount of interest incurred during the gap. It too may be one of those fees included in the APR.
10. Title Insurance – This is a necessary evil. It must be bought to cover you and the lender. It makes sure that the property title is free and clear of any claims or liens so that someone can’t come along and make a legal claim of ownership on the property after you’ve taken a mortgage out on it. Occasionally, title insurance is covered by the seller, but more often than not the purchaser is responsible for it. However, the policy rate may be less if the previous owner only owned the property a short time and the insurer is willing to reissue the policy to you.
11. Flood Certification Fee – A certification stating if your potential home is in a federally designated flood zone.
12. Pest / Termite Inspection – Aside from termites, it will cover water damage and wood rot.
13. Surveyor Certificate – A certificate that defines the parameters of your potential property. This will be necessary if the existing survey is outdated or if the property has never had one done.
Information courtesy of David Bender…Mb Financial Bank…Branch Sale Manager…614-893-4868
Looking to buy a home, I can help. Call Jody today 440.221.6383. Would you like to search for a home like an agent utilizing the most up to date accurate information available? I can help, click here. You can also visit RE/MAX Website
As you go about your annual spring cleaning rituals, take a few additional steps to save money on energy bills, improve your home’s appearance and ward off big-ticket repairs later.
Here are 10 things for you to help prepare your home for warmer months and keep it in top shape..
Inspect the AC: For about $75 to $200, a technician will tune up your cooling system and make sure you don’t spend the first hot weekend of the year with an out-of-commission air conditioner. Dirty filters make your air conditioner work harder, increasing energy costs and possibly damaging your equipment. Check them monthly and replace them as needed!
Clean Out The Gutters: Gutter cleaning generally costs $90 to $225 for a 2,000 square-foot home.
Repair Your Roof: An easy way to inspect the roof to find damage is to use a pair of binoculars. If need be, hire a handyman or a roofer to repair any missing shingles or other damages. Make sure to clean out roof drains to avoid damaging the roof and causing leaks.
Pressure Wash Your Home: Clean your home’s exterior to remove accumulated dirt, mold and stains from the siding, deck, sidewalks, driveway, garage floor, fences, and lawn furniture. You can rent a pressure washer or hire someone to help.
Wash The Windows
Prepare To Mow: A dull lawn mower blade doesn’t slice, but instead tears grass leaving it vulnerable to disease, sun damage, and insects. A blade typically needs sharpening once or twice a year, or more often depending on how big your yard is.
Lose The Lint: Make sure to clean your clothes dryer’s lint trap before every use. A clogged vent can reduce your dryer’s efficiency and create a fire hazard.
Put The Temperature on Autopilot: For an initial investment of $50 to $150 dollars for a programmable thermostat, you can save about $180 annually on cooling and heating bills. Set the hold feature for a constant, efficient temperature when you’re away for the weekend or on vacation.
Caulk The Cracks: If the gap around a door or a window is wider than a nickel, you need to reapply exterior caulk. Add weatherstripping around doors, making sure that you can’t see any daylight from the inside of your home.
Repair Sidewalks and Driveways: Fix any breakdown in concrete or asphalt before it worsens. You can patch or fill surface cracks, chips or flaking concrete yourself using cement repair products. For deeper cracks, call a professional. To increase the longevity of your driveway, have asphalt resealed every two to five years, depending on climate and wear patterns. Have concrete resealed every one to three years.
For more tips to prepare your home for spring click here.