How Seller-Paid Closing Costs Can Help You Buy a Chicago-area Home

How Seller-Paid Closing Costs
 Can Help You Buy a Chicago-area Home

     Chicagoland First-time Home Buyers (those that oftentimes are purchasing homes from the low $100K's to the low-$200K's) ... and anyone else hoping to buy in the future, should be making plans and/or taking action NOW.  

     If you're a hopeful Chicagoland First-Time Home Buyer (or someone seeking Mortgage financing for a step-up purchase) what should you be considering and educating yourself about?  What should be the beginning point in your home buying and financing process?

     First of all:  Find yourself a knowledgeable, experienced Mortgage Originator to work with.  

     Not sure how?  Here's a few suggestions:  

     Inquire with Real Estate Agents that transact in Chicago - Chicagoland area in which you hope to live.  Check with Real Estate Attorneys, your friends or family members that have Closed on a Mortgage loan recently

     Talk to Insurance Agents and others that work in the local real estate industry.  Gather names.  Note those that are mentioned multiple times.  Don't skimp on the attention you give this matter.  Do your homework.  

      Then have a long talk with me (your LO) about your finances and your Credit.  Get Pre-Approved to discover:
  •   What Home Buying options exist for you
  •   Your Credit Scores 
  •   Your Credit capabilities
  •   If elements of your Credit need polishing 
  •   The Price Range of home you can buy
  •   Establish a time frame for your upcoming purchase
     One of the most important topics you'll talk about will be regarding the Down Payment on your home purchase.  During Spring of each year, I often hear from Borrowers that Income Tax Refunds will be a contributing source to their Down Payment funds.  

     For Buyers buying during that time period ... and hoping to utilize Income Tax Refunds during their home purchase (or Agents working with those Buyers), the following actions are critical:  

  • Make sure you file Income Tax Returns as early as all supporting documentation (W-2's, etc.) is received
  • Tax Returns should be filed electronically. This expedites the depositing of Tax Refunds into Checking or Savings Accounts
  • Allow time for me (your LO) to confirm your Filing with the IRS

     It's important for Buyers to know:  Income Tax Refunds ARE acceptable to Lending Underwriters when saving and/or accumulating assets to buy a home.  

     Since most loan programs require Down Payment funds to come from the Buyer, it's important to demonstrate Down Payment funds as verifiable money in accounts.  (Accounts can be Savings, Checking, Money Market, Mutual Funds, Bonds, Stocks, and Retirement.)

      Also keep in mind that the:
  • Minimum Down Payment on FHA Loans is 3.5% 
  • FHA requires a 3.5% Down Payment, but ALL or PART of that Down Payment can be a Gift
  • Minimum Down Payment on most Conventional Loans is 5% 
  • At this time, it remains totally acceptable for Sellers to pay Closing Costs.  

     In the case of Sales Prices under $100,000:  It's almost necessary to get Seller-paid Closing Costs (due to new regulations in place as of January 10, 2014, per the Consumer Financial Protection Bureau (CFPB).)  

     Certain Closing Costs ARE allowable when Seller-paid.  That simply allows me (your Lender), to cover the cost of traditional fees incurred in a Real Estate purchase at Closing time. 

     I've included a breakdown of the guidelines (as of this writing) on the maximum allowable Closing Costs that a Seller can pay.  These Costs are expressed as a percentage (%) of the Sales Price ...

     For Conventional Loans:
  • Fannie Mae -  3% if Owner-Occupied  *
  • Freddie Mac - 3% (2.5%in some cases) if Owner-Occupied
  • Investment Property - 2%
    *  Can be greater, if Loan-To-Value is less than 90%
     For FHA:
  • Up to 6%
     For VA:
  • Up to 4% 

     As you can see, there's quite a list of things to talk over with me when your hoping to buy a Chicago - Chicagoland home.  It's normal to have lots of questions at this important and exciting time.  

     Let's get started on getting get all those questions answered. Contact me now so together we can best prepare you to successfully buy a home ...

     *  Hoping to Buy, Refinance, or Build a Home in Will County or elsewhere in the Chicagoland area?  Contact me!  I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Gene Mundt
Mortgage Originator  -  nmls #216987  -  IL Lic. 031.0006220  -  WI Licensed

American Portfolio Mortgage Corp.
nmls #175656

Direct:  815.524.2280
Cell or Text:  708.921.6331
eFax:  815.524.2281

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Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, 
Cook County, and elsewhere within IL & WI

Referrals are Welcomed!

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