Transfer Taxes: What are They? How Much are They? Who Pays?

Transfer Taxes:

What are They? How Much are They? Who Pays?

When I first speak with clients seeking information regarding mortgage financing, they're typically focused on 3 things:

1. What Down Payment they will need
2. What their Interest Rate will be
3. Can they get Approved for a Mortgage

The answers to those questions are definitely needed and vitally important. But they are not questions quickly answered.  

I must first obtain some information in order to be able to answer their questions credibly and reliably.  This includes information regarding their finances, debt, credit, savings and more.  

As the needed info is shared and our conversation unfolds, questions go back and forth between us.  Much like a ping pong ball, the questions bounce back and forth quickly and fluidly providing each of us an opportunity to get to know one-another and for fact-finding.   

It's during this conversation that the mortgage process, its direction, and needs and expectations that go along with it are normally laid out.  A time-frame for the process is provided.

It's also during this talk that the subject of monies required for costs/Closing is discussed.  Many hopeful homebuyers are surprised to find out that costs ... beyond those surrounding down payment ... are typically involved when borrowing money.  The existence of these costs and the need for their payment can come as quite a shock, especially to first-time home buyers.

A full explanation of these costs and why they are charged must then ensue.  Those Closing Costs explained and covered are:

• Lender Application Fee .. OR .. Appraisal Fee
• Appraisal Fee (Paid @ Application) If not Application Fee
• Credit Report (Paid @ Application OR @ Closing)
• Tax Service Fee
• Flood Certification
• Home Inspection (Paid @ time of Inspection)
• Lender's Origination Fee (Paid@t Closing)
• Title Fees & Title Insurance (Paid @ Closing) 
• First Year's Homeowners Insurance Premium (Paid @ Closing or immediately prior to)
• Possible Cost:  Homeowner's Association Documents & Questionnaire (If Applicable on Condos, PUDs)
• Recording Fees (Paid @ Closing)
• Transfer Taxes (These vary by City, County, State ... and by terms of Contract)  Often paid by Seller.
• Attorney Fee (Common in Illinois.  Paid @ or after Closing)

I find that the cost/fee (included in the list above) that most often confuses, "trips up" or causes last-minute panic for my clients (and sometimes their real estate team)  is that of Transfer Taxes.  It's not unheard of that this fee is addressed at the 11th hour leading up to Closing.

So:  

• What are Transfer Taxes?  
• Who is charging them?  
• And who pays them?

#1:  What are Transfer Taxes?

Transfer Taxes are those taxes that are imposed at the time that real estate property experiences a transfer of title.  

Transfer Taxes are based on the value of the property transferred.  The Recorder of Deeds/Registrar of Titles in each county collects the tax via the sale of revenue stamps that each county purchases from the IL Department of Revenue. That stamp may also provide evidence of the payment of a county real estate transfer tax.

Transfer taxes can be known by many names, such as "deed tax", "stamp tax", or "mortgage registry tax", depending on your locale.  Transfer Taxes should not be confused with mortgage recording taxes or recording fees paid at the time of Closing.

In Illinois, the sales price or the fair market value of the property sold dictates the amount of Transfer Taxes paid.  Again, the State of Illinois has a transfer tax that is typically paid by sellers and is set at a rate of $1.00 per thousand, or $100 per $100,000 of property value.  

Other states may utilize another equation for calculation of Transfer Taxes.  Please consult your real estate professional for further information regarding your local practices.

Note:  A tax professional should be consulted for advice regarding the deductibility of any Transfer Tax paid.

#2:  Who is charging Transfer Taxes?  

For those in Illinois:  Click HERE for info (as of 1-1-2019) regarding those municipalities and counties that have Transfer Taxes.  

For elsewhere:  Please refer to the info provided by the National Association of Realtors (NAR) or consult your local real estate professional to see if a Transfer Tax cost is involved in your real estate transaction.

#3:  Who pays the Transfer Taxes?

Transfer Taxes can vary from municipality to municipality and county to county within the State of Illinois.  Depending on your location, a Transfer Tax can be paid either by buyer or seller.  Payment should be negotiated at the time of contract.   

Again, for those outside of Illinois, local customs may dictate different payment methods.  What is common practice in one county/state may not apply elsewhere.

No matter which party agrees to pay the Real Estate Transfer Taxes, the taxes are shown on the Closing HUD Settlement Form.  Some Lenders require that proof of payment be supplied prior to Closing time.  Inquire with your Lender for directions regarding this matter.  

Potential homebuyers must be aware and informed regarding Real Estate Transfer Taxes (and all other Closing Costs), as they are a normal cost involved in real estate transactions in many states.  That way they will be prepared for all costs that may be incurred as they enter their real estate transaction.

The bottom line is that the mortgage process doesn't need to be confusing or challenging.  Closing Day can be completely successful and stress-free when clients are fully-informed, educated, and prepared.  

For information regarding Transfer Taxes, Closing Costs and all things surrounding mortgage financing, in Chicagoland - IL - WI, reach out to me via the info found on my mortgage website:  www.genemundt.com.

* Hoping to buy or refinance a home or investment property in New Lenox - Will County or elsewhere in the Chicagoland - IL - WI area?

Contact me today. I'll put my 40+ years of mortgage experience hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Lender - NMLS #216987 - IL Lic. #0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

gmundt@goapmc.com

www.genemundt.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, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL. etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI. 

Your Referrals are Welcomed & Greatly Appreciated!

Halloween Safety Tips for Pets - 2019

Halloween Safety Tips for Pets  -  2019

The Halloween Season with all its scary costumes,

parties, tasty treats, spooky decorations, and haunted homes are finally here ...

But sadly, potential dangers also arrive with it.  And that means we should be taking the time and making the effort to plan, prepare, and place safety precautions in place.  

Those preparations, plans, and safety precautions should keep our furry friends in mind for this year's Halloween Trick-or-Treating hours and parties taking place too.

Please follow the important pet safety tips found on the informative flyer below ... that way we make sure that this year's Halloween celebrations remain memorable for all the right reasons:  

Protect Your Furry Family Members:

Follow These Halloween Pet Safety Tips

*  Do not ever feed a pet any candy.  

Candy, especially chocolate, can be 

lethal to an animal

*  Restrict Pets to an area where they can 

find quiet and less-stressful activities

*  Halloween can be a day of stress for family pets.  Place them out of danger

*  If a Trick-or-Treater, do NOT provoke

someone's pet, whether in a 

doorway or in a yard

*  Should you dress up your pet, do not 

restrict their movements or eyesight, 

impede their breathing, or have anything dangling off them or their costume

*  Do not allow your pet near pumpkins, especially if they contain an open flame/candle

*  Pick-up and dispose 

of all empty candy wrappers and 

trick-or-treat bags.  

 Place glow sticks 

and jewelry up 

and out of the 

reach of your pet.  

They can 

be hazardous if ingested

*  Be mindful of battery-operated 

decorations, electricity sources or 

 electrical cords.  Don't allow chewing!

*  Be aware of the activity around you 

and all mischievous activities and 

people during Halloween season  

*  Make sure your pet is always properly identified (microchip, collar and ID tag).  

This is in case your pet escapes through an 

open door while you're distracted with 

your visiting trick-or-treaters

*  Loud noises and sudden movements can make your

pet nervous and on-edge.  Stay aware of their reactions and emotions

* If you're entertaining for Halloween, 

keep your pets away from the festivities and 

in a safe room.  Masks and costumes change how people look and smell to a pet, so even familiar people may become frightening. 

Put a sign on the door to the safe room.  

That way your guests know it’s off-limits. 

*  Watch your kids! Don't let them 

share their candy with a pet

Follow the safety tips above.  That way your Halloween celebrations will be memorably safe, fun, and sweet for everyone!  

*  Mortgage Financing doesn't need to be scary. 

If you're hoping to buy or refinance a home or investment property in New Lenox - Will County - Chicagoland - IL/WI, Contact me today!    Together we'll fully prepare you for your successful mortgage Closing.  A real TREAT in today's financing world ...
     I'm easily found at:

Gene Mundt

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

American Portfolio Mortgage Corp.

NMLS #175656

Direct:  815.524.2280

Cell/Text:  708.921.6331

 gmundt@goapmc.com

  www.genemundt.com

  eFax:  815.524.2281  

              

  

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 Greatly Appreciated and Welcomed!

There's Hidden Diversity in Student Loans: What it Means to Homebuyers

There's Hidden Diversity in Student Loans:
What it Means to Homebuyers

Did you know that it is now thought that there are almost 18,000 bird species to be found across the world?

A recent study released by the American Museum of Natural History revealed a new accounting ... one that almost doubled the number previously known and detailed by researchers.  This new larger number came as a surprise, as scientists have studied birds intently and been "birding" for a long time.  

The new study also revealed that long-held beliefs and methods of scientific bird species classification were antiquated or wrong.  Scientists now believe there is a "hidden" diversity in bird species.  That birds can look similar and actually breed together, but actually be from different species altogether. 

Fascinating stuff, right?  But what does it have to do with Student Loans?  And how does it affect homebuyers? 

Well, just as there are different species of birds ... there are different "species" of Student Loans.  

The 3 major classifications (or "species") of Student Loans are:

• Federal Student Loans
• Private Student Loans
• Refinance Student Loans

... but variations and rules and regulations for each classification of loans can vary greatly.  

And not only is there subtle variations in Student Loans themselves, but their repayment plans, program details, and the impact they take on Mortgage Loan Applicants can also be drastically different.  Those differences can prove challenging ... not only when trying to understand them ... but when considering their use and their short and long term ramification to payments and finances.

Why is that the case?

For starters, not all creditors report Student Loans in the same manner to the 3 major Credit Bureaus (TransUnion, Experian, and Equifax).  And not all loan programs or guarantors of mortgage loans view Student Loan debt in the same fashion.

Confusing, right?

As shared above, Student Loans fall into 3 categories, but typically it is Federal and Private Student Loans that are most utilized.  I'm focusing here on those that are Federal Student Loans, as they provide the widest menu of options available to current and future Mortgage Borrowers holding student loan debt.

But first, it's important to know:  

• Federal Student Loans are administered by the Federal Government.  
• Federal Student Loans are the most frequently used form of Student Loan.

There are 3 main types of Federal Loans (Department of Education).  Those  are:

1. Direct Subsidized - (Sometimes called Subsidized Stafford Loans)  These loans help undergraduate students exhibiting financial need.  Interest is not typically charged on the loan during certain periods, such as when the student is at school (at least 50% of the time).  
2. Direct Unsubsidized - Available to both undergraduate, graduate, and professional degree students.  There is no need to prove financial need associated with this type of loan.  Interest is charged during all periods.
3. Direct PLUS - Direct PLUS Loans have a fixed interest rate and are not subsidized.  That means that interest charges accrue during the time the student is enrolled in school. 

Direct PLUS Loans come in two different forms:

1. Grad PLUS - Graduate and professional students are allowed to borrow money to pay for their own education and all costs not covered by other financial aid/grants, up to the full cost of their attendance.
2. Parent PLUS - These loans are the financial responsibility of the parent, not the student.  They have a fixed interest rate and are not subsidized.  Parent PLUS loans allow parents to borrow money to cover costs not covered by their student's financial aid package, up to the full cost of attendance.  Financial need is not a requirement.

How and when these Student Loans are reported to a Credit Report is critical for current and future home buyers -mortgage applicants.  Most student loans are in deferment while the student is still considered a full-time student.  But once that student is no longer in school or considered "full-time", they must begin repayment of their student loan(s).  

Delay in repayment ... or forebearance ... can also come into play.  Rules for eligibility apply in these cases.  

So the bottom line is that Mortgage Lenders must be aware and know the ramifications of each type of Student Loan if repayment of the loan is in play.  They must also know how that repayment is reported to the credit bureaus. 

Why?   

The method of reporting can impact their mortgage applicant's Debt-to-Income (DTI) level.  

In some cases: 

• Creditors show NO payment schedule in effect for the Student Loan.  That translates to ZERO (0) monthly payment or obligation for the Loan.
• In most cases (not all), a Mortgage Lender's Underwriter calculates the monthly obligation at 1% of the Student Loan's outstanding balance.  

Equation Example:  

       A $50,000 loan with ZERO payment on the credit report:

.01 X $50,000  =  $500 Monthly Payment 

Are you even more confused now?  Then consider this ... 

There are other calculations available that can actually lessen a monthly payment burden.  The calculation used is dependant on:

• The Student Loan type involved 
• The Mortgage Loan Program being utilized  

For potential home buyers that possess a series of Student Loans, something else might be considered too.  A consolidation of their student loans may be an appropriate and wise pursuit prior to starting your home buying and financing process. 

If considering this action, it's important to conduct thorough upfront research ... or seek professional guidance and assistance ... to arrive at the most advantageous decision and financial action.  What is discovered and the actions taken could have short term or long term impact on the ability to finance a home.  It could also do harm to your overall financial status.

All these things can seem pretty daunting.  But it doesn't have to be.  An experienced Mortgage Lender can make all the difference between home buying success and failure ... and wise and unwise financial decisions. 

So who you choose to work with as your Mortgage Lender is vitally important.  The choice made has consequences and will have a huge impact on the outcome of your mortgage application.  

Simply, the knowledge possessed and depth of experience your Mortgage Lender has earned while working with prior Student Loan applicants should matter greatly to you.

If you hope to buy a home in the Chicagoland area ... either now or in the future and have Student Loans, be aware of these 3 key points:  

1. Not all Student Loans are the same 
2. Diversities exist between Student Loan types.  They can affect the outcome of your home buying/mortgage financing efforts.  Don't assume you know the outcome of a mortgage pre-qualification you haven't had.
3. If you have Student Loans and hope to buy a home, it's no time to work with a rookie or inexperienced Mortgage Lender  

Choose a Chicagoland lender that knows and understands all the "species" of Student Loans made both thoroughly and well, how each can affect you financially, and how they can impact your ability to successfully buy and finance a home (both in the short and long term) and make monthly mortgage payments.  

Seek the help of a Mortgage Lender as soon as you decide you wish to buy.  Don't go it alone.   Get the assistance, info, and facts you need to buy successfully, fluidly, and with the best mortgage options available to you. 

* Hoping to buy or refinance a home or investment property in New Lenox - Will County or elsewhere in the Chicagoland - IL - WI area?

Contact me today. I'll put my 40+ years of mortgage experience hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Lender - NMLS #216987 - IL Lic. #0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

gmundt@goapmc.com

www.genemundt.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, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL. etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI. 

Your Referrals are Welcomed & Greatly Appreciated!