Mortgage Closing Costs
Most people concentrate on current mortgage interest rates and/or what type of house
they would like to buy without paying due attention to mortgage closing costs. The fees and costs involved in getting a mortgage and buying a house are out of pocket expenses and will reduce the available funds for down payment. The lenders may offer to add some of their fees on the mortgage and some of those costs may be met by the seller. These costs will vary depending on the country or state.
There are some expenses that may have to be paid even the property purchase has not been completed at the end. Here are the lists of the fees involved;
1. Legal and/or agents fees. The purchaser may decide to employ a legal representative or an agent to carry out the searches, negotiations and handling of the moneys and title check and registration. As soon as instructed these agents will start spending money and time on behalf of the buyer. Those expenses have to be paid regardless of the outcome.
2. Appraisal and/or survey fees. A surveyor gives his independent opinion of how much he thinks the property worth and further surveys should be carried out or not. The mortgage is based on this valuation. This valuation may be required to be carried out before the buyer submits any offer or an offer subject to valuation may be accepted.
3. Further in the process of buying, there are searches to be carried out on the property. A utilities search to make sure the property has no issues with its connection to essential services, local authority search to make sure the property has been built with proper permissions are some of the searches. This list could be as expansive as the buyer wants. Some of those searches may be readily available depending on where the transaction takes place.
4. At the time of completion of the sale, there are state taxes and government taxes to be paid. In addition, the property title registration fees and title insurance premium must be allowed for. The solicitor or the agent will be able to provide the buyer with the estimated fees and taxes.
5. Then there is home insurance. No mortgage company will let the completion to take place without a proper insurance.
There could be a number of additional expenses depending on the lender, the state and how much the borrower wants to look into properties history. These could be further structural surveys, subsidence survey, termite checks. Some lenders might charge a lending fee as well, usually maximum 1% of the borrowing. Right at the beginning of the home purchase process these fees must be estimated and accounted for. Detailed fees and cost lists can be obtained from the property agents or legal representatives and from the lender of buyer's choice. The fees make an important part of the mortgage. Therefore, before deciding on a lender, the fees must be compared along with the mortgage interest rates.
by: jslee
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