Don’t Forget the Closing Costs
Most first-time home buyers are prepared for the cost of the down payment, but not as familiar with closing costs. Self-made millionaire and experience real estate investor Barbara Corcoran said, “the biggest mistake that first-time homeowners make is they forget they need closing costs – not just the down payment of say 10 or 20 percent.”
Closing costs vary depending on the type of loan and the location of the home. Some of the things closing costs may cover include appraisal, attorney fee, closing fee or escrow fee, courier fee, credit report, escrow deposit for property taxes and mortgage insurance, FHA up-front mortgage insurance premium, flood determination or life of loan coverage, home inspection, homeowners association transfer fees, homeowners’ insurance, lender’s policy title insurance, lead-based paint inspection, loan discount points, owner’s policy title insurance, origination fee, pest inspection, prepaid interest, private mortgage insurance, property tax, recording fees, survey fee, title company title search or exam fee, transfer taxes, underwriting fee, and VA funding fee.
In busy markets, some sellers will offer to pay closing costs as a seller concession. Sellers may offer concessions to home buyers to sell the home faster, especially if they are in the process of buying a new home. Additionally, just like down payment assistance, there are various programs and grants you may be eligible for that covers your closing costs.
For a limited time, CMG Financial is offering $1,500 toward closing costs with our Make It Possible Grant. To be eligible for the grant, your qualifying income must be under 80% of the Area Median Income, it must be for a home purchase on your primary residence, and you must be using a conforming conventional loan. You can find out if you qualify using our mortgage calculator or visiting www.makeitpossiblegrant.com.
The Make It Possible Grant can also be used in conjunction with the HomeFundIt grant. First-time home buyers who crowdfund with HomeFundIt have an opportunity to qualify for up to $1,500 or 1% of their home purchase price, through a funds-matching grant. To qualify, the home buyer must complete pre-purchase housing counseling before their purchase contract is signed. Ask me for more information.
Mortgage closing costs are often overlooked, especially by first-time home buyers. You’ve already saved for the down payment, find out if you qualify for closing costs assistance.
Sources: CNBC, Zillow