Clearing the Closing Costs Hurdle

Clearing the Closing Costs Hurdle      

     Down Payments, and their accumulation are often the     First-Time Homebuyer's primary focus once they decide to buy.  Monetarily and mentally, the down payment becomes the one goal they concentrate on ...  

     So when I raise questions regarding the availability(and source) of funds needed for their Mortgage Closing Costs, the question can be somewhat of a surprise.  

     In fact, I often find that many First-Time Buyers are either completely unaware that funds will be needed for these Costs, they've (incorrectly) assumed that their Down Payment covers them, or the costs can be "rolled into the loan" (not allowed, in MOST cases).

     But it's a fact:  There are (typically) Closing Costs to consider when borrowing money to buy or Refinance a home.  
     The following are the most common costs seen in Chicagoland transactions:

• Title Insurance
• Closing Services
• Lender Fees 
• Home Insurance Premium (also Escrow set-up)
• Attorney Fees (in Attorney States/if used) 
• Appraisal Costs
• Real Estate Taxes (Escrow set-up)
• Home Inspection Costs
• Recording Fees
• Transfer Taxes (where applicable)
• Credit Report Fees
• Flood Certifications (where applicable)
• Homeowners Association Documents (if applicable)

     ... and they can add up to thousands of extra dollars needed in order to close a loan.  
     

     But Closing Costs don't need to be a hurdle for Buyers to jump.  Options are available to assist Buyers with some of their Closing Costs.   

     One such option is to request that your Seller pay a portion of your Closing Costs.  It's important to point out that this request should be made at the time of your offer and become part of your Real Estate Contract. The payment of these fees is subject to guidelines.

     These Seller contributions are seen fairly often in Chicagoland home buying transactions.  They help facilitate real estate transactions, as they make it possible for Buyers and Sellers to initiate and complete deals that would not have been possible otherwise.  

     There are maximum contributions a Seller can make, however.  Different lending programs allow for different contributions.  Those contributions, expressed as percentages of the Sales Price, are provided below:  

     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% 

    Besides the obvious benefit of initiating or keeping a transaction together ... the Seller-paid Closing Costs option can also provide financial "flexibility" to a Buyer after their Closing.  The merits/disadvantages of using this option are something that I, as your Mortgage Originator, will analyze and discuss with you prior to your making an offer on a home.

     Closing Cost monies don't have to be an insurmountable hurdle to your buying a home or qualifying for a mortgage.  Many options exist that can help you buy.  

     The key to your success lies in finding and working with a Mortgage Originator that is aware of their availability, offers them as a part of their services, and is successful in putting them to work on the clients' behalf ...


     *  To learn more about the monies needed to buy a Chicagoland - IL - WI home, please read my article, "Think You Need a 20% Down Payment?", then contact me with your questions ...

  

  
     *  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'm easily found at:

Gene Mundt

Mortgage Originator  -  nmls #216987  -  IL Lic. 031.0006220  -  WI  #216987

American Portfolio Mortgage Corp.

nmls #175656

Direct:  815.524.2280

Cell or Text:  708.921.6331

eFax:  815.524.2281

www.genemundt.com

gmundt@goapmc.com

 

              

      

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, Lockport, Channahon, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, 

Cook County, and elsewhere within IL & WI. 

Referrals are Appreciated and Welcomed!