Mortgages - What you need to know!

When you purchase a new home, there are costs associated with buying that go beyond just the down payment. These costs can be similar for refinances and they are commonly referred to as closing costs. The term closing costs generally refers to all the costs associated with closing a home purchase or refinance. A more accurate term to reflect these costs is settlement costs. Settlement costs include 4 categories; lender fees, third party fees, prepaid items and taxes/government fees. Let's discuss each of these categories separately. Lender Fees  (fees charged directly by the lender) Origination Fee In order to process a mortgage application, lenders may charge a flat upfront fee, or a percentage of the mortgage loan. This is referred to as the Origination Fee. Some lenders may not charge an origination fee. Origination fees are paid at the time of closing. Points In order to lower your interest rate, you might want to consider paying points. One point is equal to 1% of the ...

As with everything else about real estate, sales contracts or purchase agreements vary from state to state -- and even by real estate company in some places. Variations in regulations place even greater emphasis on working with professionals with local knowledge. While the terms used may change from place to place, there are seven common terms that are particularly important for you to understand. 1. Buyer cost sheet.  Technically, this sheet is not part of the purchase contract, but it's still important. A property purchase agreement can range from a few pages to a dozen or more, depending on your location and the complexity of the transaction. Buyers need to focus closely on the buyer cost sheet, sometimes called "cash to close." The buyer cost sheet -- typically generated by your lender but sometimes given to you by a Realtor -- should include everything you will be responsible for paying when you buy a home. Items included on a buyer cost sheet may inclu...