Blog - Month: August 2019
Month: August 2019
Extra Costs of Buying a House: What First Time Homebuyers Can Expect Before Closing
Mortgage calculators and Zillow.com offer great insights for home shoppers to understand the cost of purchasing a home, but there’s a lot more than a mortgage and property tax that go into the real cost of buying a home. For many first-time homebuyers, extra costs like appraisal fees and title insurance aren’t on the radar until after meeting with a real estate agent. A good realtor will address these costs in your first meeting, but before you even start seriously looking for a house, you should know that there’s a long list of additional fees that go into a real estate transaction. If you’ve never bought a house before or haven’t been in the market for a while, here’s a list of extra expenses and fees you’ll encounter before closing. Home Inspections Home inspections are a must for home buyers — many lenders may even require them before the appraisal. Whether your home inspection is optional or required by the bank, it will always be an extra expense. Depending on how thorough the inspection, you can expect to spend between $300 and $500 out of pocket. Closing Costs The closing costs on your property are fees from third parties and your lender, ranging from document handling to on-site inspections. For most real estate transactions, you can expect to spend an additional 2-5% on fees (for example, a $300,000 house will cost an additional $6,000-$15,000). Here ar
Homebuying 201: What is Mortgage Underwriting?
In 2018, the total amount of mortgage debt in the U.S. totaled around $15.42 million. That’s a pretty big chunk of the U.S. economy, which will put out around $20 trillion dollars GDP in 2019. As the economy continues to expand in the U.S., the mortgage market should continue to grow, too, as more Americans can afford to purchase houses. A mortgage is the most common way to purchase a home in the world, and there’s an in-depth and sometimes lengthy process for a bank to approve a loan to purchase a home. This approval process is called underwriting, and if you’re new to homebuying, here’s what you can expect next when you’ve been pre-approved for a loan! What is Underwriting? un·der·writ·ing | noun The process through which an individual or institution (a bank) takes on financial risk for a fee. Whenever a bank issues a mortgage, there is always some risk that the borrower may not be able to pay. Determining this level of risk takes some time — a lot longer than it takes to pre-approve a loan online. Mortgage underwriting is a specific formula that will weigh your credit reputation, capacity to meet payments and your current assets/collateral to determine if the terms of your pre-approval are worth the risk. It answers the question, “will we (the bank) be able to make money on this agreement?” What Happens When my Mortgage Goes into Underwriting? As soon
Homebuying 101: What Happens After the Seller Accepts Your Offer?
Whether you’ve been searching for months or fell in love in just a week, the homebuying process doesn’t end when you’ve found a house you love. In fact, you’re really just getting started! Even after the seller accepts your offer, there are several steps before you officially get to move in. These steps can get a bit drawn out and confusing — especially if you’re a first-time homebuyer. If you’re wondering what happens after the seller accepts your offer, here are the seven next steps to remember before you get the keys to your new home in Northeast Ohio! Step 1: Accept the Contract When you agree on a price with the seller, you will enter a formal contract that outlines all the next steps for your home purchase. When a buyer, seller and their agents sign the agreement, they are officially under contract. This contract outlines all the next steps the buyer must complete in order to close the deal. This can include securing a mortgage, purchasing home insurance and ordering a home inspection. Remember, being “under contract” doesn’t always mean the sale will go through. This is just a first step that outlines what you are obligated to do before the title is in your name. Step 2: Pre-Approval and Proof of Funds If you haven’t done so already, you’ll need to get a pre-approval letter from your lender to show that you are securing the