The "Other" Costs of Buying A Home
The down payment and mortgage insurance costs outlined earlier are only part of the costs associated with buying a home. When buying a home, you should become familiar with all the costs involved so you are ready for them.
Application Fee
When you apply for your mortgage, many lenders ask you for an Application Fee to pay the lender's costs to process your application. With GSF's ZERO HASSLE HOME LOAN We WILL NOT ASK YOU FOR AN APPLICATION FEE.
Closing Costs and Points
Closing costs may include:
- The title fee and closing agency fees. The title fee includes a mortgage title insurance policy to assure us that you have legal title to the property you are buying.
- The first year premium for mortgage insurance, if required.
- Property transfer stamps, if required by the community in which the home is located.
- Recording fees to record your mortgage and deed in the public records.
- Pre-paid interest may be charged depending on your closing date.
- Discount points, which represent the charge for providing you with the funds at the agreed rate. Each point is equal to 1% of your mortgage loan amount. Points paid when purchasing a home may be fully tax deductible in the year in which they are paid.
For further information you may wish to contact us. We will explain the fees in detail.
If you would like to reduce the number of points required, you may choose a "zero point rate." We will quote the current rate based on zero points. Conversely, if you have discretionary funds available at closing and would like to use them to reduce your interest rate and monthly payments, you may offer to pay more points at closing.
In addition, there are other costs that you pay on your own. They may include costs for:
- An attorney to review your purchase contract before you sign it;
- A professional home inspection to ascertain the condition of the home you are considering - its foundation, roof, plumbing, heating, windows, etc. prior to finalizing the purchase offer;
- The first year's premium for your homeowner's insurance policy (must be paid before closing);
- An up to date property survey (except for most condominiums) will be needed;
- Any maintenance or redecorating you'll want to tackle in the near future;
- And, of course, you'll have moving costs.
As you can see, the costs are quickly beginning to add up. Depending upon the amount you have saved, these other costs may even dip into the amount you have planned for a down payment. Be sure to share any concerns you may have regarding these costs with us.
With GSF's ZERO HASSLE HOME LOAN we can help you negotiate these fees away!
Knowing The Full Cost Of Your Loan
When considering all the costs of your loan, remember that your mortgage interest rate tells only part of the story. Just because you may obtain a mortgage rate a quarter percent lower than someone else's doesn't mean your overall loan costs will be less. It's important that you compare the annual percentage rate (APR) of your loan to the APR of others to be certain you're making accurate comparisons.
The annual percentage rate includes costs that do not show up in the loan's stated interest rate. To calculate annual percentage rate, the following expenses are taken into consideration: interest rate, any anticipated changes in rate, finance charges (such as points), and any prepaid closing costs (such as mortgage insurance premiums) etc.
When comparing APR's, be sure to compare similar terms. Ensure that in the case of an Adjustable Rate Mortgage (ARM), the APR is based on increasing the rate at each adjustment interval until it reaches the fully indexed rate.
Today's Mortgages
Mortgage lending has evolved to a point where we now have a number of different loan types from which to choose. While there are many choices, we want to help take the confusion out of mortgage lending for you. We provide clear explanations of the differences between the many types of mortgage loans and help you decide which loan will be right for you. GSF Mortgage has revolutionized the Mortgage industry with our Zero Down, Zero Hassle Home Loans.
Next >> << Previous