The Price You Pay First
The words Down Payment often cause people rent property,
deterring them from even considering the purchase of a home.
Those words make owning a home sound so darn expensive and
out of reach! Well guess what? This false assumption may be
more costly than your down payment. You need to know that
down payments are not price tags, and you can obtain a home
loan to pay off the cost of your home.
Although you have options and help from lenders like Countrywide,
by no means, is the mortgage going to be completely free of
any financial obligations. You must be prepared for all of
the costs, not just the down payment. Like posing interest
in a college, or making a submission for acceptance into an
organization or business: it costs to apply.
Closing costs in the home loan world are charges for processing
your loan and mortgage.
Some of these charges are standard and mandatory, while others
you can make in order to lower your loan’s interest
The closing costs you pay do not go directly to your lender.
They go to the government and to your mortgage broker if you
are not using a direct lender. Usually closing costs come
to about three to six percent of the amount of the loan.
When you first turn in your application you pay fees to your
lender. These are called third party fees and go to people
like your appraiser. You may also be paying a credit report
fee to the company who issued your credit report.
Lenders are then required by law to give you a document called
a “Good Faith Estimate” which gives you the lender’s
best guess what your closing costs will amount to. Keep in
mind that these are estimates and are not always correct due
to variation in geography, loan specifications and other considerations.
Some fees you will pay for closing include commission for
your real estate agent, an origination fee, point that are
added to your rate to make the APR, a settlement or closing
fee, title insurance, property taxes, attorney’s fees,
city and state charges, survey cost, pest inspection and flood
Also know that there are pre-paid closing costs required
at the time of purchase, which is the time you officially
contract your loan. These fees are mostly to protect you during
the loan and include interest, homeowners’ insurance,
private mortgage insurance and escrow or impound insurance.
This may sound like a ton of charges, but you are able to
lump some of these costs into your actual loan. This is probably
a good idea if you are tight on cash going into the purchase
but you will have more later on in the loan.
It is good for you to know exactly what all of these terms
mean in order to know what all of the costs are. Contact a
Countrywide representative and he or she will be happy to
explain all of these closing costs in further detail.