Thinking About Buying a Home?

Are you considering buying a home and thinking about whether or not you can truly afford it? You know that there is the cost of the home, taxes, insurance, but you keep hearing about closing costs and you’re not sure what they are, how much they are, or to whom they are paid. That is where Family First Mortgage in Lafayette, LA can help!

Purchasing a home can be a very overwhelming task, especially as a first time home buyer, and we want to make sure we are helping you out as much as possible whether it be answering questions or qualifying you for a home loan.

Let’s Talk Closing Costs

Closing costs are fees that must be paid when you are finalizing the purchase of a home. The actual closing of the sale is when the title is transferred from seller to buyer and the costs are paid by one of the two parties.

How Are They Determined?

Closing costs are mainly decided by where you live, the property itself as well as the loan type that is being used to pay for the home. The list of fees that can be included in closing costs is pretty extensive so it’s important to make sure these are outlined in detail when discussing cost with your lender.

A few examples of the types of fees that are included with closing costs can be seen below:

-Application fee: covers the cost for the lender to process the application, similar to what you might find for the rental application fee

-Attorney fee: covers the cost of an attorney to review the documents on behalf of the buyer and the seller

-Underwriting fee: this goes to the lender to cover the costs when verifying your eligibility for the loan itself

Prepaid interest- this is any interest that will be accrued between the closing date and the due date of your first mortgage payment

When it comes to average closing cost, mot home buyers expect to pay a minimal percentage of the purchase price of the home, usually less than 5 percent. When you are discussing the details of your home loan with your lender, they will give you an estimate of what you might expect to pay but keep in mind with any estimate, it can change so review any revised editions of your estimate carefully.

Don’t Hesitate to Negotiate

You may have heard the saying that everything in life is negotiable, well that includes closing costs as well. Closing cost varies from state to state and lender to lender. Some of these closing costs aren’t truly needed specifically when it comes to things like courier costs which are avoidable. You also want to make sure you are shopping around and comparing lenders and what they have to offer, as that can save you quite a bit when you are finalizing the closing costs on your home.

There are mortgages available that don’t include closing costs but with those mortgages, you may end up paying for it elsewhere like in a higher interest rate for example.

Lastly, you can negotiate directly with the seller who will end up paying the closing costs, and a motivated seller may end up covering the costs to close the deal.

The Final Steps

When you are getting ready to close on your home, you will be given the final details on your closing costs. This can be different from the original estimate due to a multitude of factors. You’ll want to ask questions regarding any changes you see to make sure all changes are necessary and understood.

Contact Us Today!

We know that getting the ball rolling on the home buying process can be tough but it doesn’t have to be. All you have to do is reach out to Family First Mortgage in Lafayette, LA today!

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