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Closing: So what will happen at closing? - At the closing, you will most likely sit at a table with me, the broker for the seller, probably the seller, and a closing agent. The closing agent will have a stack of papers for you and the seller to sign. While he or she will give you a basic explanation of each paper, you may want to take the time to read each one and/or consult with me to make sure you know exactly what you are signing. After all, this is a large amount of money you are committing to pay for a lot of years! Before you go to closing, your lender is required to give you a booklet explaining the closing costs, a "good faith estimate" of how much cash you'll have to supply at closing, and a list of documents you will need at closing. If you do not get those items, be sure to call your lender BEFORE you go to closing. Be sure to read the HUD booklet on settlement costs . It will help you understand your rights in the process. Don't hesitate to ask questions, I will be happy to answer them to the best of my ability.

Closing: What are closing costs? - Closing costs are the costs associated with processing the paperwork to buy a house. Closing costs which you will pay at settlement average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise.

Closing: What if my offer is rejected? - Your original offer is often rejected for one reason or another. But do not let that stop you. Now you begin negotiating. I will help you. You may have to offer more money, but you may ask the seller to cover some or all of your closing costs or to make repairs that would not normally be expected. Often, negotiations on a price go back and forth several times before a deal is made. Just remember, do not get so caught up in negotiations that you lose sight of what you really want and can afford! I can help you keep on track.

Closing: What is an escrow account? - An escrow account is an account that is established by your lender to pay your real estate taxes, homeowner's insurance and mortgage insurance on your behalf.

Closing: What is earnest money? - Earnest money is the deposit you make on the home when you submit your offer. Earnest money proves to the seller that you are serious about wanting to buy the house. When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies.

Closing: What is equity? - Equity is the value of your property that is in excess of claims against it. When you make loan payments, the principle part of your payment increases your equity in your home.

Closing: Where do you go to close on a property? - You will go to a local title company or attorney who will perform the closing. All your mortgage documents will be waiting for you at closing as well as any other documents requiring your signature.

Closing: Who chooses the Title Company? - In Orlando it is customary that the seller selects the title company, however, this can be negotiated.

Financing: Can you apply for a loan before you've found a property? - Yes! You have the opportunity to get pre-approved for a mortgage today. A pre-approval will take into consideration your personal information such as income, debt and credit history. If you receive a pre-approval, we will use this information to determine your maximum loan amount. Once you find a property we can complete the remaining pieces of the application.

Financing: How much money will I have to come up with to buy a home? - The amount of money required to purchase a home depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money, down payment and closing costs. When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you.

Financing: How much of a down payment will you need to purchase a home? - The minimum down payment required depends on the loan program you select. Most lenders offer loans with various down payment options, including no down payment and low down payment programs.

Financing: If you finance 100% of the sales price, why can't you finance the closing costs on a VA loan? - The Veteran's Administration does not permit the loan amount to exceed the value of the home. Therefore, 100% of the sales price can be financed, but all other costs must be paid at closing.

Financing: What are ARM Loans? - With Adjustable Rate Mortgages (ARM), the interest rate can change, so your monthly payment may increase or decrease. Most ARMs have rate caps to regulate the amount the interest rate for a loan can increase or decrease over the lifetime of the loan. The interest rates are usually lower for ARMs than for fixed rate loans during the first few years, so ARMS allow buyers to purchase more expensive homes than they could with a fixed rate loan.

Financing: What are FHA Loans? - The Federal Housing Administration (FHA) insures some mortgage loans so that more lenders are willing to make loans to borrowers who might not be able to qualify for other loan types. This is true for borrowers with sketchy credit histories or because of high debt-to income ratios. With a FHA insured loan, a homebuyer can make a down payment of as little as 3 percent. The FHA charges the borrower an upfront mortgage insurance premium fee, plus a monthly charge on all loans.

Financing: What are VA Loans? - The Veterans Administration (VA) created a loan program to help military veterans purchase homes. VA loans require no down payment. Veterans, current military personnel and spouses of veterans who died of service-related injuries may apply for VA loans. Certification of eligibility is required. If you choose to apply for a VA loan, please make sure that the person with VA eligibility is listed as the primary borrower.

Financing: What are points? - One point is one percent of the loan amount (for example, on a $100,000 loan, 1 point equals $1,000). Lenders usually will give a lower interest rate depending on the number of points a borrower is willing to pay.

Financing: What does "Pre-Qualification" mean? - In a pre-qualification, you will be asked basic information about yourself and the type of home you are interested in buying. You will have the opportunity to view various mortgage programs and their rates. This will help you narrow down which mortgage programs best fit your needs before you apply. If you'd like to determine the maximum loan amount you may qualify for, you can visit the calculator section of the Cendant site. You can save this information for a future visit by registering on the site.

Financing: What is a Truth in Lending statement? - The Truth in Lending statement provides detailed information about the interest charges and finance charges that you will incur. It defines the cost of your loan expressed as the APR, the amount of interest you'll pay in dollars, and the total of your payments if you make the minimum payment required over the life of the loan.

Financing: What is a balloon mortgage? - A balloon mortgage is a mortgage that is amortized over the full term of the loan repayment period but at the end of a specified period the balance of the mortgage comes due. Thus, a balloon payment needs to be made. For example, with a 7-year balloon you would make monthly payments for seven years that have been calculated based on a 30-year mortgage payment. At the end of the 7 years, the remaining principal balance would be due and payable in full.

Financing: What is the Mortgage Good Faith Estimate? - The Good Faith Estimate (GFE) discloses estimated costs associated with your mortgage transaction. The GFE, by Federal law, estimates the lender's charges along with the local closing agent's charges and fees. The GFE also includes estimated amounts for real estate and property taxes and homeowner's insurance.

Inspections: Is a termite inspection required? - For conventional loans, the investor or lender will require a termite inspection if there are visual signs of infestation. All government loans require a pest inspection on any structure that is ground level or of total wood construction (including condos). There are termites in Southwest Florida and even though many homes are concrete block construction (CBS), it is wise and highly recommended to have any home inspected for termites regularly.

Insurance: Why is private mortgage insurance (PMI) required? - Private mortgage insurance (PMI) is an actual insurance policy that the lender takes out to protect them if the borrower defaults on the loan. This protects the lender and at the same time, enables buyers with minimal down payment the opportunity to purchase a home. PMI is usually required for loans that are greater than 80% of the property value. Once 20% or more of equity has been achieved in a home, you can apply to have the PMI removed from most loans.

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