First Time Home Buyer – Other Mortgage Loan Costs

Not just the down payment So many of us are told you gather a down payment and then you buy a house and that's true, and the guidelines have gotten a little looser, so for a first time home buyer, 3 or 3

5% is often all that you need as a down payment If you happen to be a veteran, or buying in a rural community, sometimes there are even 0 down payment loans available But on top of that down payment there are two key things, there is something called closing costs and those will vary from institution to institution That's the cost of processing your loan Along with those closing costs are title fees

Depending on the title company you use, the title search, the paperwork that's drawn, the recording fees All of that is part of your closing costs In addition to the closing costs, which very rough figures, you can figure $1,800 to $2,200 closing costs, depending on your loan amount Unfortunately a really low amount still has some fixed costs and so it doesn't go down a lot So you have those

Then you have something called the pre-paid costs The pre-paid costs are your first years homeowner's insurance that you pay upfront The amount of money that we need to gather to form an Escrow account so that when your taxes and insurance come due, that there's money to pay that Then the interest for the days left in the month So if you close on the 15th of the month, you'll have (depending on how many days in the month) 15 more days of interest to pay

Those are pre-paids If you had in the back of your mind $3,500 – $4,000, that would be a little high, but that would give you a starting point If we go back to that pre-approval we keep talking about, that will give you a much better sense of those costs It's important for two reasons One reason is that you might need to save up a portion of that money

The other reason is, when you're shopping, especially if you're a first time home buyer, it's not uncommon for the seller to pay a portion of those costs on your behalf That makes your transaction affordable The more information your realtor has from your lender, the better deal that they can put together for you

Source: Youtube

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