Buyers - BEWARE the Hidden Costs at the Closing Table!
By Michelle Shelton
How are your closing costs calculated? That is the question of the year. Only the title company knows for sure!
Seriously, how do you plan? There are lender fees, escrow fees, title fees, courier fees, signing fees, interest fees, impound fees, and more. Even I can't give my clients a straight answer when they ask me about their closing costs.
You, the buyer, should plan for the worst and do your research and select the best team. The title company can work up an estimated fee sheet for you.
Although getting a good interest rate is important and it is okay to shop loan officers, you may want to go with a Mortgage Broker that can shop for the best interest rate from various lenders. The lender is the actual person that gives you the money. The Loan Officer, Banker or Mortgage Broker is the one that find the best lender for you.
As a buyer, I tell people to plan 3% of the price of their home. This is a rough estimate...it could be much less and in my opinion it should never be more. If it is more, this means your lender is charging you more. The title company can also tell you their title fees and have a fee guide they can send you or you can go and pick up.
So, when you are planning to purchase a home, consider that you will have out of pocket costs. It is possible to do 100% loans and you can even roll your closing costs into the purchase if you can get your new home to appraise at the higher value. Talk to your real estate professional, title company and loan advisor to get more information. |