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Home Loan Closing Costs

Don't Forget About the Closing Costs When Applying for a Home Loan!

Some tips you should know when you are ready to buy and applying for a loan~

You’ve faithfully saved for that dream home down payment….but don’t forsake saving for the closing costs. Prepare for them to be 2- 5% of the purchase price.

Lenders are required to provide a buyer with a “Good Faith Estimate” within 3 days of a loan application submission. This estimate summarizes the details of the loan and anticipated closing costs. These costs will vary from lender and broker. 

Common closing costs include loan application fees, points, prepaid homeowners' insurance, an appraisal fee, inspection fees, transfer taxes, escrow fees, attorney fees, recording fees, prepaid interest , prepaid private mortgage insurance, title insurance, and title search costs. Other costs include the cost of obtaining a credit report, processing fees, courier fees and paperwork preparation fees. (Investinganswers.com)

Homebuyers should receive a closing disclosure 3 days before the estimated closing date on their home. The statement includes final details about the loan and the closing costs.

OPTIONS

*Conventional loans do not offer buyer assistance with closing costs but inquire with your lender options available with FHA and VA loans to include a portion if not all of the closing costs within your loan to avoid having to come up with thousands more at closing. Keep in mind this will increase your principal loan balance and consequently, your monthly payment.

*Talk with your REALTOR® while you are considering the offer you want to make on a home. Consider asking for a seller credit at closing towards the buyer’s closing costs. This request may need to be reflective of your offer price in order to maintain favorable terms. Your offering price will become increasingly important if you are not the only buyer with interest in the property and there is a high likelihood that there will be multiple offers for the seller to consider. 

Speak with your lender early and determine how much you’ll be responsible for at closing. Unwelcomed surprises are not always avoidable in a real estate transaction but with a reliable agent and a good lender, lack of communication will never be the cause of disaster.

Consider us at San Luis Obispo Realty where we pride ourselves on sticking with you through every detail of your transaction!

Home Interest Rates Going UP!

The Cost of Waiting - The Cost of a Fraction of a Percent.

Have you ever examined the fluctuation of interest rates and realized the difference a day can make?!

Rising interest rates is a sign of a thriving economy.

The economy has made nearly a full recovery since almost a decade ago when the housing market downturn began wreaking havoc. Wages are up and unemployment now sits in the low 4 percentile. A basis that flirts with inflation and inflation hurts mortgage rates.

Interest rates are projected to increase steadily heading into 2019, however rates are still low by historical standards. Now could be the time to lock in your rate, while rates in the mid-4s can still be found. Here is an example of how your payment may be impacted by waiting too long to make your next move:

At today’s rate, payment on a $250,000 loan might typically be $1250, approximated. Should the rate go up even 1/10th a percent in the next quarter, this would increase your monthly payment by almost $15. Should you wait for the projected increase in the 4th quarter, your payment may be higher by almost $75 from today’s rate. In 2019, when the rate is projected to reach the 5 percentile, your monthly payment could be higher than today’s rate by over $100!

The cost of waiting to purchase a home is avoidable if you pick up the phone and call us today!

 

Can You Afford to Buy a Home?

How Much Home Can You Afford?

Your search for the perfect home begins with its’ affordability. The amount of your salary is the largest factor that may come in to play. “The general rule of thumb is that you can purchase a home that costs two or three times your annual salary," says Harrine Freeman, a financial expert and the owner of H.E. Freeman Enterprises.

You can also find simple guidance in the 28/36 rule where your housing payment (mortgage, insurance, and taxes) should not be more than 28% of your monthly income (gross) and your debt to income ratio should be less than 36%. Your debt to income ratio is the comparison of how much you owe towards recurring monthly obligations, such as credit cards, loans….etc., in relation to how much you make in income.

Once you are in knowledge of your standing, as well as how much of a down payment you intend on putting down, you can figure out the maximum monthly mortgage payment you can afford. See our Simple Payment Calendar on the right side of our home page.

You are one giant step closer to finding the home that is perfect for you! With a proper understanding of your buying position you are ready to search the market! Contact our offices and any one of our brilliant agents that are poised and ready to answer all of your questions along the way and guide you into optimizing your position as a strong buyer in today’s market! 

 

and our Morro Bay Affiliate & second location

Morro Bay Real Estate Partner

San Luis Obispo Realty
805-544-9161
info@san-luis-obispo-realty.com
441 Marsh Street
San Luis Obispo, CA 93401

CA BRE# 00577121

 

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