As a rule of thumb you should set
aside 5% – 10% for closing costs and other minor charges, if you are selling
you can help pay some of the buyer closing costs if you are buying you may ask in
your offer to purchase that the seller pay some or all of your closing costs specially
if you are not asking for much of a discount from the asking purchase price.
Non-Recurring Closing Costs
Associated with the Lender
l Appraisal fee: The property being
appraised is collateral for your mortgage (you’re borrowing money against the
value of the property you’re borrowing money to buy) so the lender will want to
verify that the property’s value is comparable to similar property based on
recent sales in your area. l Credit Report l Flood certification fee: The
certification verifies whether your property is in a federally designated flood
zone. l Flood monitoring: Monitors remapping of flood zones. l Lender’s
Inspection fee: for newly constructed property to verify that construction is
complete with carpeting and flooring installed. l Loan discount: AKA points, each
point equal to 1 percent of the loan amount. l Loan origination fee l Mortgage
broker fee l Tax service fee: For monitoring your payment of property tax.
Other Lender Fees
l Administration fee l Appraisal
review fee: Usually done on higher-valued properties. l Document preparation l
Underwriting fee l Warehousing fee: The cost of a “warehouse” line of credit. l
Wire transfer fee: This is the cost to transfer funds from one account to
another.
Items required to be paid in advance
l Homeowner’s insurance: You are
usually required to pay the entire first year’s insurance at closing. l
Mortgage insurance: Some first-time homebuyer programs still require the first
year’s mortgage insurance to be paid in advance. l Pre-paid interest: The
interest that accumulates between closing day and the first payment due date. l
Up front mortgage insurance premium l VA funding fee: This is paid to the
Veterans Administration for guaranteeing your loan.
Reserves Deposited with Lender
l Homeowners insurance impounds: You
will need to deposit two months’ worth of premiums into the impound account to
start it up. l Mortgage insurance impounds: Usually two months’ worth of
premiums. l Property tax impounds
Non-recurring closing costs
l Closing/escrow/settlement fee l
Courier fee: This is the charge for
sending documents back and forth between lender and borrower. l Home
inspection: This is an optional, but recommended, cost. l Home warranty l
Homeowner’s association transfer fee
l Loan tie-in fee: Usually charged by the closing agent, this is for services
they provide in dealing with the lender.
l Notary fees l Pest inspection l
Recording fees: To record documents with county recorder. l Sub-escrow fee: The
title insurance company charges this for dealing with the closing agent.
l Title insurance: You pay this to
make sure you have clear title to the property.
Text or Call 954-648-6095
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Antonio Ortega LLC Licensed Real Estate Professional
Global Luxury Realty, LLC
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Broward Homes for Sale PQ letter or Prequalification letter Plantation, Davie, Cooper City, Tamarac,
Sunrise, Weston, Fort Lauderdale, Pembroke Pines, Hollywood, Miramar.
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