Closing Costs ... people are always interested in them.
HOW they can be paid, borrowed, financed ... and possible credits for Closing Costs that might be available to them from their Sellers or their Lender.
I find that many of my new clients have preconceived notions about Closing Costs. Or they're just plain confused by them.
And it's easy to understand why this can be the case. The differing loan types ... Conventional, FHA, VA, USDA, Jumbo loans ... all have varied Rules and Guidelines. It can be tough for new Borrowers to wrap their head around all of it. It's a lot to digest.
Adding to the confusion: In some cases, the amount of down payment made on the purchase can affect the amount of allowed credits received from a Seller.
Yep. See what I mean? It can seem a bit overwhelming.
That's why, when I hold my initial conversations with Borrowers regarding Closing Cost options, I begin at the beginning ... with the basics. That means an explanation of what Closing Costs are.
My explanation always includes a list of those cost items that are "Pre-Paid" ... meaning they are funds needed to Close on a Conventional Loan in addition to the Down Payment made.
In previous articles, I've discussed the various programs available for Home Buyers with Conventional Financing, but suffice it to say ... 3%, 5%, 10%, 15%, and 20% Down (or more) programs are prevalent today.
For those making Investment Property purchases:
The rules regarding the Seller's contribution towards Closing Costs is straightforward and clear cut. The Seller can contribute no more than 2% of the Sales Price, if negotiated into the Contract.
Here's an example:
- Title Fees
- Appraisal Fee
- Attorney Fee
- Credit Report
- Flood Certification Fee
... as well as pre-paid items, which generally are set aside for:
- Real Estate Taxes
- Homeowners Insurance
- Interest Charges
- Home Owners Association Dues (if applicable)
- Mortgage Insurance Premiums (initial or renewable)
Need more info? Have questions regarding your Chicagoland home buying and financing? Let's talk today!
I'm easily found at:
Mortgage Originator - NMLS #216987
IL Lic. #0006220 - WI License
Gene Mundt, Mortgage Originator, 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, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin.
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