Monday, January 31, 2011

What Are Recurring and Non-Recurring Closing Costs?

Lenders use a Good Faith Estimate to explain closing costs to a home buyer. These estimates contain recurring and non-recurring closing costs.

Definition of Closing Costs
Some home buyers are shocked when they discover it costs more than the price of a home to buy it. When you buy a car, for example, dealers don’t tack on fees and charge extra (except for sales tax) when buyers finance that vehicle. But buying a home is different.

While a buyer doesn’t pay sales tax on a single-family residence or condo, a buyer does incur additional fees to get the loan and for processing the paperwork to buy a home. The closing costs run about 3% of the sales price when the home is priced over $200,000, and a higher percentage applies when the price of a home is less than $200,000.

• Impound / Escrow Accounts -
Lenders may require that a buyer establish a reserve account held by the lender for future payment of taxes and insurance.

• Closing Agents - The individuals who prepare the closing documents and deed charge a fee.

• Title Policies - Title companies charge to issue title insurance that protects the borrower and the lender.

Definition of Non - Recurring Closing Costs
Fees that are paid once and never again are called non-recurring. These fees are one-time charges for such items as:

• Escrow or closing

• Appraisal

• Credit Report

• Title Policy

• Notary

• Wire fees

• Courier / Delivery

• Attorney fees

• Endorsements

• Recording

• State, County or City Transfer Taxes

• Home Protection Plan

• Natural Hazard Disclosure

• Home Inspection

• Fees paid to the lender in conjunction with the loan on the HUD-1, line 800.

Definition of Recurring Closing Costs
Recurring fees are those charges that you will pay again and again. They include such fees as:

• Fire Insurance Premium

• Flood insurance

• Property Taxes

• Mutual or Private Mortgage Insurance Premiums

• Prepaid Interest

Friday, January 28, 2011

Did you know.......

That FHA allows for you to have someone co-sign on your home loan without them having to live in the property? Once qualified, if a person fits the criteria to co-sign based on FICO score, debt and income (amongst some of the requirements) they can go on the loan and help you meet the required income level to qualify for your home and can still currently own a home or buy a home in the future themselves. Please contact me to find out how this works and what preperation is needed for this process.

Wednesday, January 26, 2011

Top 5 Reasons to Short Sale Your Home and Avoid Foreclosure

1. Credit - You do not necessarily have to be late on your mortgage payments to be a candidate, therefore no negative reporting on your credit to your FICO score. Foreclosure is also more damaging to your credit than a short sale.

2. Time - Banks are averaging approvals sooner than before, 4-8 weeks.

3. Savings - No out of pocket expenses in most cases.

4. Incentives - You may be eligible for HAFA (Home Affortable Foreclosure Alternatives) and receive relocation incentives of up to $5000.

5. Peace of Mind - Having someone take over the hassle of dealing with the bank.

Contact an Experienced Realtor who can guide you and let you know what to expect.