| House Refinance Center |
| Mortgage Closing Costs And Points |
| Closing Costs You Should Know About: Get An Estimate In Writing Mortgage refinancing will cost you. There are no free rides. So be informed and be prepared to pay. The following will give you an idea of what to expect. With knowledge and education, you will not be surprised. And remember, if you suspect that you are being gouged, just walk away. Find another lender. Credit report $25 to $80 Appraisal $150 to $400 Home inspection $175 to $350 Pest inspection report $150 to $350 Taxes Recording fees $15 to $45 Escrow $300 to $450 Title policy Points 1% to 2.5% of the loan amount Application fee $75 to $300 Title search and title insurance $450 to $600 Lender's attorney's review fees Loan origination 1% to 2% Ask your lender for an estimate on these fees. Calculate the monthly savings the refinance mortgage gives you. Then determine how much you will save in monthly mortgage payments over three years. If this amount does not cover the fees it is costing you to refinance, then it is not worth the trouble. prev: next: |
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| Ouch! Private Transfer Fee: You Didn't See This One Coming At closing be sure to ask if you are paying a Private Transfer Fee. This could add a few thousand dollars to your closing costs. Developers need to recoup some of their hard costs, and this fee is one way to accomplish this. It is sometimes called a Reconveyance Fee Rights. Every time the house sells a 1% of the selling price, or more goes back to the original developer. This could be for 99 years, 50 years, 25 years or whenever. There is no point in arguing. Just pay up. It is illegal in 4 states, Missouri, Kansas, Oregon and Florida. It is okay in California as long as it is disclosed upfront. Texas prohibits the fee in certain situations. The payoff for the developer is that he has a financial instrument, which is an income stream. This is worth something. He has the opportunity to sell this instrument to Wall Street investors for a lump sum of money. This funding helps him with his cash flow and with his infrastructure costs. In theory, he would then pass on some savings to the purchaser of his houses. The purchaser pays a lower price. Not everyone is convinced that this is a good idea. It is sure to be a controversial topic, and a political nightmare. The National Association of Realtors, and the American Land Title Association have come out against the fee. Here are the two big questions. First, Is this fee required to be disclosed on the HUD-1 form? And second, given two houses that are similar, one with the fee attached and one without the fee, which one will the purchaser choose? Is this fee any different from a Municipal Utility District (MUD) or from a Public Improvement District (PID)? Typically a MUD or a PID is reflected on the property tax bill. The county or city collects the money and forwards a set amount to the developer. And this is done annually. This transaction goes smoothly, and there is no fighting or fussing. PIDs and MUDs are more transparent than the Private Transfer Fee. A PID or MUD has a board of directors and the special tax assessment is for a specific project, such as a library or parking, or for streets and sidewalks. In the long term, the homeowners' tax bill will decrease as more people move into the neighborhood and the city has a larger pool of homeowners to share the tax burden. The problem with the Private Transfer Fee is that it comes as a shock to the buyer. It might be mentioned in the CC&Rs (Covenants, Conditions & Restrictions). However, the title company usually sees the CC&Rs a couple days before closing, and with the rush to close on time, this is overlooked. The bottom line is that the purchaser doesn't get enough time to discuss the CC&Rs with the title company. If a homeowner is aware of the Private Transfer Fee, he will definitely ask for a better deal on the house price, plus some extras thrown in for good measure. Buyer Beware! prev: next: Readers of this article also enjoyed: When To Get A Second Mortgage Government-Backed Zero Down... |
| Know Your Closing Costs And Be Prepared To Negotiate When you are buying a house and after you apply for the mortgage, the lender gives you a Good Faith Estimate (GFE). The GFE itemizes the various fees you are expected to pay in the process of closing the deal. This is your opportunity to negotiate, and bargain for the best deal you can get. Do not automatically accept the services that your lender provides. Appraisers, house inspectors, surveyors and insurance agents can all be found online. Alternatively, you can ask a friend to refer some contractors. Contact these companies directly and tell them how much you were quoted. They will most likely beat the prices. Your realtor will steer you to a settlement company that he works with. Do not accept this company until you have had a chance to shop around. You have the right to decide who closes your mortgage. Ask the seller to pay all or part of the closing costs. Insist on a fixed amount such as $5,000 or $7,000. Avoid having the seller pay for specifics such as the appraisal, or the house inspection. Scheduling the closing date is crucial. You should close on the end of the month, or a few days before. You have to prepay the interest from the closing date until the end of the month. For example, if you close on the 10th of January, you will have to pay 21 days of interest. If you follow these steps, you could save thousands of dollars on your closing costs. RESPA requires lenders to provide the borrower with a final copy of the GFE up to one day before closing. This gives you the chance to examine the GFE, and compare what was quoted with the actual costs. By law, if you accept services from the lender, there are some charges that can not be increased, and others that can only increase by a maximum of 10%. prev: next: Home: Readers of this articles also liked: My Community Mortgage From Fannie... When To Get A Second Mortgage Know Your Closing Costs And Be... |
| FHFA To Ban Transfer Fees: It's About Time February 4, 2011 A transfer fee also known as a capital recovery fee, is a creative way for real estate developers to raise funds. The developer gets 1% to 3% of the sales price every time the house is sold. The federal government has finally seen the flaws in this system and will be imposing laws to stop the practice. Government agencies, such as Fannie Mae and Freddie Mac, will not be involved in any mortgages where there is a transfer fee. Existing properties with transfer fee arrangements will have their contracts canceled under a grandfather clause. The new rule will not affect non-conforming loans, or loans by private lenders who are not using Fannie Mae or Freddie Mac. N.B. Continue reading more on this topic below. "Ouch! Private Transfer Fee: You Didn't See This One Coming". This article is from August 2010. |
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| Don't Forget Closing Costs When purchasing a house we tend to focus on the price we want to pay and on the downpayment. Many times we forget about the closing costs. These are all the miscellaneous fees that go with buying a house. These fees could run 2% to 4% of the price of the house. So be prepared. Shop around for the best deals and bargain for every penny. Watch the slideshow. |
