7 Common Closing Costs to Consider When Purchasing a Home

Purchasing a home is an expensive proposition, but for many buyers, the realization that a host of closing costs need to be paid before the sale can go through is often a concern when it comes to ensuring there is enough money set aside to go through with the transaction.

In simple terms, closing costs are the fees associated with the acquisition of one’s new home that have nothing to do with the final sale price. These costs are in addition to the actual purchase price and include everything from legal fees to land transfer taxes to moving expenses.

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To ensure no financial surprises pop up when it’s time to buy your home, here are some of the most common closing costs that need to be considered.

Legal Fees
A real estate lawyer will be needed to assist you in drafting the deed, preparing the mortgage and conducting various searches related to the property. While the cost of a lawyer varies, you can expect to pay at least $1,000 for their services.

Title Insurance
Almost all lenders require that a homebuyer purchase title insurance to protect against losses in the event of a property/ownership dispute. Title insurance is basically an insurance policy that protects the homeowners from problems related to the title to their home, such as title fraud, undischarged liens, zoning issues and survey problems. Homebuyers can expect to pay between $150 – $400 for title insurance at closing.

Interest Adjustments
Unless you are purchasing a home on the first of the month, odds are your mortgage payment won’t be due until the following month. However, you’ll still be required to pay interest on your mortgage up to the first theoretical payment date at closing. It’s important to ask your mortgage lender how your IAD (interest adjustment date) is calculated so you’re prepared for this closing cost.

Prepaid Utilities Adjustments
A buyer must also reimburse the previous owner for any utility payments they may have already paid for the upcoming year. While this means you won’t have to pay for these utilities yourself for a while, it’ll add to the closing cost pile and can run hundreds of dollars.

Property Survey
A land or property survey is a legal written and or mapped description of the location and dimensions of the land that you’re acquiring. This is another requirement of a lender and is necessary for any transfer of ownership. A property survey will reflect all dimensions of the house and include anything that was added since the house was originally built, such as a new addition, deck, fence or pool. It can also point out any encroachments, such as a neighbor’s fence. This will generally run somewhere between $500 and $1,000.

Down Payment
The most important closing cost of all, the down payment can be anything you’ve negotiated with the seller and your mortgage lender, but typically falls around 20% of the purchase price. If you’re selling a home as well, and the deal hasn’t been finalized, you may need to acquire bridge financing. This will cover the cost of the down payment for a short period of time, with only interest paid at closing. Otherwise, prepare to buy your new home with whatever money you’ve been saving.

For more information about closing costs, contact your local office today.

 

AskHomesale.com provides real estate advice and information for home buyers, home sellers, and homeowners alike. Askhomesale.com is part of the Homesale Realty Family. The Homesale Family of Companies is the leading real estate company serving the Baltimore, Maryland, South Central and Southeastern PA real estate markets.  Homesale Realty has more than 27 offices with over 1,200 REALTORS®. Homesale Realty’s footprint includes Maryland real estate offices in Baltimore City, Federal Hill, Fells Point, Westminster, and Timonium. Pennsylvania real estate offices include YorkLancasterWyomissingChambersburgGettysburgHarrisburg, and Schuylkill Haven.

Tips for Home Buyers  |  Tips for Home Sellers | Tips for Homeowners

7 Common Closing Costs to Consider When Purchasing a Home

Choosing the right Real Estate Agent

Buying or selling your home can be emotional endeavor, but with the help of a dedicated and dependable real estate agent, it can be an enjoyable and peaceful process. There are many aspects that you must consider when trying to choose the agent that is right for you. The needs for buyers and sellers differ, which is important to think about when you are selecting someone to represent you. By following some of these simple guidelines, you will be heading in the right direction for a successful real estate experience.

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Research & Record Your Results

This cannot be stressed enough.  Referrals from family and friends are great but we still encourage you to do your research and interview.  Go to open houses and watch an agent in action; this will help you see them in a professional and casual setting.  Another suggestion is to drive around the neighborhoods in your market place and see which agents and companies dominate the area.  Look for agents that are experienced with homes in your price range and area. Agents that are familiar with what you are looking for can help you differentiate between good and bad options. Make a list of your top choices for a Real Estate Professional and Google them.  In that list, record the pros and cons from their online presence; reviews, ratings, testimonials, etc.


Schedule Interviews & Ask Questions

This is the biggest step in the process. Keep in mind that as a seller, top agents will market your home on multiple websites and social media outlets.  As a buyer, ask how they will they notify you as homes that meet your criteria enter the market. Find out how the agent will keep you updated and represent you during negotiations.  There are hundreds of questions you could ask, but remember to separate the good, better, and best agents by comparing the answers you get to your questions.

 

Lay Down your Laws with Some Simple Guidelines

Real estate transactions consist of fine details that can be missed and disrupt the whole process if you don’t have the right agent in your corner. Communication is a key aspect and you must stress that your agent needs to be available via email or phone, whichever is preferred.  Set realistic goals and stress that you and your agent must work as a productive team.

 

When comparing possible agents, the agent with the most closings isn’t necessarily the best one for you. The most important thing is commitment to you as a client, which can only be revealed in a face-to-face meeting. Remember to not always go with the first agent you find, you should shop around and then come back to the agents that truly made an impression and have the resources to make your housing wants a reality.

 

When it comes to buying or selling your home, finding the right real estate professional makes the difference!

 

Choosing the right Real Estate Agent

WOULD YOU RATHER……BUILD OR BUY?

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You’ve made decisions in your personal life and career; you’ve worked hard and now consider yourself established. The time has arrived where you are ready to own a home, and make that dream a reality.

But now you’re faced with the option of creating your own home from the floor up or purchasing a pre-existing home in your preferred town/city. Either buying or building a house will get you into a place to call home, but they are two very different paths with pro’s and con’s that need to be addressed. Here is a guide to weigh your options.

Buying a home can be as simple as contacting your local Realtor, going on showings, finding the right home for your life and having your offer be accepted. However, when it comes to purchasing a home there are numerous details and steps to consider during the buying process.

Building your own home gives you the flexibility to have things just the way you would like, to your own individual specifications. Building new means starting with a blank canvas, but even with the added conveniences, there are some drawbacks.

 

PRO’S

Buying

Building

* Convenience* Cost – Best value, usually able to negotiate better price on the home.* Appliances and fixtures are typically included, desired upgrades can be negotiated into the purchase.* If your offer is accepted, you can likely close and move into your new home in 30-45 days.

* Less stress – Much less considering during the buying process, less decisions to be made and/or negotiated. Don’t forget to consider home inspections.

* Already in an established area – easier to consider the character of the home and the area it is located in.

* Landscaping is usually complete and matured.

* Tremendous sentimental value and personal pride in making it ‘your home’.* Everything is able to be customizable from the carpet in the living room to the countertops in the kitchen and everything in between; structurally and design-wise.* Everything is brand new and up-to-date.*Construction materials and building code will be up to the latest standards.

* Energy efficient – better building standards, new quality materials and efficient appliances and systems.

* Deferred maintenance – you will not have to replace a leaky roof or water heater for many years. Unforeseen issues will most likely be covered by a warranty.

* New communities offer incentives such as recreational facilities, community maintenance and locations close to stores.

 

CON’s

Buying

Building

* Older floors plans do not have the same fluid traffic flow and opening feeling that most new homes possess.* You will most likely have to make compromises on your list of wants and needs.* Existing homes are often in need of some maintenance or renovations.* Less energy efficient – might need updates on wiring and other major systems depending on the age of the home. * Usually take s 6-7 months to build, and you may even have to wait 1-2 more months depending on unforeseen issues; bad weather, builder’s schedule, material defects.* New construction typically has higher costs and most initial estimates are not accurate. A lot can change during the building process.* Might have to live with the noise and construction vehicle traffic if you are located in a new community, which could go on for months.* The personal time commitment can be draining emotionally and financially.

*Must also purchase the land for your house to be built on.

 

 

The decision to build or buy is not an easy one and each has its own set of advantages and problems that need to be carefully weighed against one other. There is no wrong or right choice; only your personal preference.  The best thing you can do is to plan ahead; review the pros and cons of each choice thoroughly; determine your budget and stick to it; consider job security and long-term plans for being in the area; and last, but not least, don’t forget about maintaining your own sanity!

 

 

WOULD YOU RATHER……BUILD OR BUY?

7 Things to Avoid Before Purchasing a Home

 

If you have been approved for a mortgage for your next home, you might be assuming you can breathe easy now and concentrate on packing. Not quite yet though.mortgage

While most of your hard work of building a good credit profile and gathering savings for a down payment and closing costs is behind you, it’s important to remember that the lender will recheck your credit just prior to your settlement date and will also need confirm a few details such as your place of employment to make sure nothing has changed.

That’s the key phrase—“nothing has changed.” You will want to maintain the same credit profile you had for the loan approval until your mortgage paperwork is completely signed.

Source: money.aol.co.uk

 

Avoid the following actions to ensure a smooth settlement:

 

1. Don’t apply for new credit: It may seem natural to apply for a credit card at a home improvement store or a furniture store when you are about to become a homeowner. It’s almost become cliché in the mortgage industry, but the warning still bears repeating: Don’t buy a truckload of furniture until after your loan closes. Applying for credit can lower your credit score. Not only will you lose a few points because of a credit inquiry, but if you are approved for new credit, a lender may worry that you will spend up to your new credit limit and then default on your loan.  If you absolutely need to obtain new credit or accrue debt before closing, talk with your loan officer as soon as possible.

 

2. Don’t close any credit accounts:You may be feeling that this is a good time to get your financial house in order by closing unused credit accounts or transferring your debt to a new credit card with a zero-interest balance transfer offer. While that’s a smart move financially, it’s a bad one for your credit score because you lose points when you have a higher usage of debt compared to your limit on one credit card and to your overall credit availability. Wait until your closing is complete before you make these changes. 

 

3. Don’t shuffle around your dollars & cents:Your lender will need the most recent bank statements before you go to settlement, so if you have any unusual deposits you will need to provide complete documentation of where the money came from. If possible, it’s best to move the cash you will need for your home purchase into one account before you apply for a mortgage. If not, make sure you have complete and accurate records readily available.

 

4. Don’t increase your debts:In addition to your credit score, your debt-to-income ratio is extremely important to a loan approval. If you take on more debt you could be in danger of going above the maximum acceptable debt-to-income ratio. Along with increasing your debts, do not co-sign on a loan. It is especially risky during the mortgage lending process since you will be financially liable for someone else’s debt.

 

5. Don’t skip a payment or make a late payment: One of the most important elements of your credit score is your history of on-time in-full payments. Payment history comprises about a third of your credit score. 

One solitary 30-day late payment can clip 60 to 110 points from your credit score. Maybe not a huge deal if you had an 800 score, right? Possibly. However, if that 30-day late payment is a mortgage or rent payment, some lenders will boot your application altogether. Many will require at least 12 consecutive months of on-time payments in order to qualify for a home loan. So don’t get so caught up in your move that you forget to keep up with paying basic bills.

 

6. Don’t buy a car: You may be feeling that a new car would be a nice addition to the driveway of your new home. Resist that feeling. Even if you can easily afford a new car, the depletion of your savings or the addition of a new car loan could derail your mortgage application. Wait until after you have moved to switch to a new car.

 

7. Don’t change jobs if you can help it: While a job change could mean a raise or a path to a better future, it could also delay your settlement. Your lender needs to verify employment and will need paystubs to prove your new income before your loan can go to settlement. Lenders crave stable, reliable income that’s likely to continue.

Lenders are likely to slam on the brakes if you take a new job in a different field, or if you decide to start your own business. Or even if you get a promotion but see some or all of your income shift to a commission basis.

The bottom line: Any change to your employment is significant. Keep your loan officer in the loop, and ask questions when in doubt. The last thing you want is to waste time and money on a home loan you have little chance in getting approval.

 

*****In other words, no matter how hard it is at this exciting time, it’s better to do nothing than to do anything.

 

Sources: Realtor.com & Yahoo.com
7 Things to Avoid Before Purchasing a Home

Renting vs Buying

Couple Front StepsIf you are a potential buyer searching for the perfect place to live, your gut reaction is probably that it is cheaper to rent a home than it is to buy one. However, according to Trulia’s chief economist Jed Kolko, that is not the case. On average in the United States, it is 38 percent cheaper to buy a home than it is to rent one. Of course, this varies from state to state.

 

Of course, while the base cost of buying a home is cheaper than renting one, there are many other factors to be looked at before deciding between the two. Are you looking to stay somewhere for an extended period of time, or will you be living there for less than 10 years?

 

Upkeep is also something to consider while looking for a place to live. On paper the cost of buying a house may be lower, but overall it actually may be less expensive to rent if you have to continually have maintenance work done.

 

Renting also has the upper hand for people looking for jobs. If you are still moving around the job market or do not have a stable long-term position, it is likely more financially responsible to rent a house so that you are able to move if necessary. However, if you are looking to settle down somewhere, in the long run it looks as though it is more profitable to buy a house rather than rent one.

Renting vs Buying

House Hunting Tips

Couple House RealtorIdeally, we’d all love for house hunting to be a quick and easy process that results in the perfect home. Unfortunately not all homes come equipped with a two-story pool and a waterfall, so this is not always the case. Here are some things to keep in mind when trying to find a place that fits all of your needs.

 

Don’t Choose a House for its Awesome Bathtub

Sometimes it can be easy to overlook certain important details—like those dubious mold spots on the ceiling—in favor of a flashy new granite countertop that the owner will be certain to emphasize. When looking at potential houses, keep in mind the difference between the things you need and the things that it would be nice to have. While it can be exciting to find the perfect cabinet handles, make sure you consider them a bonus and not a priority.

 

Living Next Door to a Prison

Location is one of the most important things to consider while looking for your new home. How far is the house from your job or prospective jobs? How far away is the nearest grocery store? What is the neighborhood like? Who are your neighbors? Visit the house at different times of the day to see what changes. Even the house of your dreams can turn into the house of your nightmares if you live next door to a sewage plantation, so it is important to take these things into consideration when you feel like you have found the perfect house.

 

Play Detective

Don’t be afraid to be slightly nosey when it comes to looking for your new home. Remember that you are going to be living there, so it’s important that the house fits all of your needs. Check the cupboards, the closet space, and inside every door. Lift rugs and look under furniture. Try to envision your own possessions in the space and even measure areas to be certain everything fits. While not a deal breaker, it might be upsetting to find out after you move that your vintage bookshelf is taller than the ceiling.

 

It’s Not NASCAR

A common mistake made when house hunting is trying to rush through the process. Whether it’s because it was pushed it off until last minute or because they chose the first decent house presented to them, many people end up with houses not suited to their needs. Take the time to make a checklist of the most important things that you are looking for in a home, and then take the list to each tour. This way while you are making sure that every house has room for your fish tank, you won’t forget that your youngest son needs a bedroom.

While keeping these things in mind, however, remember to relax and enjoy yourself. House hunting is an exciting time full of potential and possibilities for your future, so have fun!

House Hunting Tips

How to Choose the Right Real Estate Agent

Buying or selling your home can be emotional endeavor, but with the help of a dedicated and dependable real estate agent, it can be an enjoyable and peaceful process. There are many aspects that you must consider when trying to choose the agent that is right for you. By following some of these simple guidelines, you will be heading in the right direction for a successful real estate experience.

Research & Record Your ResultsReal Estate

This cannot be stressed enough.  Referrals from family and friends are great but we still encourage you to do your research.  Go to open houses and watch an agent in action; this will help you see them in a professional and casual setting.  Another suggestion is to drive around the neighborhoods in your market place and see which agents and companies dominate the area.   Make a list of your top choices for a Realtor and Google them.  In that list, record the pros and cons from online reviews, ratings, testimonials, etc. 

Schedule Interviews & Ask Questions

This is the biggest step in the process. Keep in mind that as a seller, top agents will market your home on multiple websites and social media.  As a buyer, they will notify you as homes that meet your criteria enter the market. Find out how the agent will keep you updated and represent you during negotiations.  There are hundreds of questions you could ask, but remember to separate the good, better, and best agents by comparing the answers you get to your questions.

Lay Down your Laws with Some Simple Guidelines

Real estate transactions consist of fine details that can be missed and disrupt the whole process if you don’t have the right agent in your corner. Communication is a key aspect and you must stress that your agent needs to be available via email or phone, whichever is preferred.   Set realistic goals and stress that you and your agent must work as a productive team.

When it comes to buying or selling your home, finding the right real estate professional makes the difference!

How to Choose the Right Real Estate Agent