We offer many different kinds of mortgage products to help you qualify for the best possible loan. Our experienced staff is ready to help you choose the right product for you. We are happy to have you call us or visit a local branch to meet with one of our qualified loan representatives to help you determine which loan type is best for your needs.
What costs are involved in closing? There are certain standard costs associated with closing the sale of a house. These costs are split between the buyer and the seller, as spelled out in the sales contract. As you or your realtor negotiate the sales contract for your new home, you should not only work to get the sales price you want, but also work to limit the number of closing costs for which you will be responsible. We will walk you through the closing costs, answering any questions you may have and explaining which costs are decreed by law to be yours and which are negotiable.
Good Faith Estimate
The Good Faith Estimate is a form that determines which mortgage is best for you. It shows the loan terms and settlement charges you will pay if you decide to go forward with the mortgage process and are approved for the loan.
Loan Related Costs
Loan Origination Fee
This covers the administrative expenses for setting up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.
One option for the homebuyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals one (1) percent of the mortgage amount. For example: on a $150,000.00 loan, 1 point would equal $1,500.00.
The appraisal fee may be incorporated into the closing costs or payment for such fee may be required by the lender at the time the loan application is submitted.
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15th, your first monthly payment begins to accrue interest on June 1st, with your first mortgage payment due July 1st. At closing, an interest payment covering the accrual period between May 15th and May 31st may be required.
At closing, a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.
This closing cost is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period during which the buyer will occupy the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period during which the seller occupied the property.
Transfer Taxes and Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.
Homeowner's insurance covers replacement costs for damage caused by fire, wind or other disaster that might affect the value of the property. Typically, the insurance also includes personal liability and theft coverage.
Flood or Quake Insurance
Additional hazard insurance coverage that is required for homes located in a designated hazard zone as established by the Federal Emergency Management Agency (FEMA). An appraiser, inspector, or your realtor can let you know if a property resides in a hazard zone.
Private Mortgage Insurance (PMI)
Insurance required for conventional mortgage loans when the borrower's down payment on the house is less than 20 percent of the loan value.
This policy protects both the buyer and lender by ensuring a clear chain of title. It ensures that that the person who sells the property has the legal right to do so.