Recently I had someone ask me what they could expect in closing costs and they had a hard time understanding why certain costs were included and what the costs are exactly. This mostly explains what is itemized on the GFE or HUD-1. Whether you have to come out of pocket for any of these will depend on your specific situation, so keep that in mind while you are reading. In order to help others understand, here is a quick breakdown of what costs you may see on your Good Faith Estimate and Final HUD-1 Settlement Statement:

• Appraisal (up to $450) – This is paid to the appraisal company to confirm the fair market value of the home.
• Credit Report (up to $30) – A Tri-merge credit report is pulled to get your credit history and score.  You cannot supply your consumer pulled report and the scores pulled form the internet from any place other than myfico.com are not real scores nor are they accurate.
• Closing Fee or Escrow Fee (generally calculated a $2.00 per thousand of purchase price plus $250) – This is paid to the title company, escrow company or attorney for conducting the closing. The title company or escrow oversees the closing as an independent party in your home purchase. Some states require a real estate attorney be present at every closing
• Title Company Title Search or Exam Fee (varies greatly) – This fee is paid to the title company for doing a thorough search of the property’s records. The title company researches the deed to your new home, ensuring that no one else has a claim to the property.
• Survey Fee (up to $400) – This fee goes to a survey company to verify all property lines and things like shared fences on the property.  This is not required in all states.
• Flood Determination or Life of Loan Coverage (up to $20) – This is paid to a third party to determine if the property is located in a flood zone. If the property is found to be located within a flood zone, you will need to buy flood insurance. The insurance, of course, is paid separately.
• Courier Fee (up to $30) – This covers the cost of transporting documents to complete the loan transaction as quickly as possible.
• Lender’s Policy Title Insurance (Calulated from the purchase price off a rate table. Varies by company) – This is insurance to assure the lender that you own the home and the lender’s mortgage is a valid lien. Similar to the title search, but sometimes a separate line item.
• Owner’s Policy Title Insurance (Calulated from the purchase price off a rate table. Varies by company) – This is an insurance policy protecting you in the event someone challenges your ownership of the home.
• Natural Hazards Disclosure Report - Required by law in the state of California for the seller to give the buyer.  Reports run between $90 to $150.  May be required by other states
• Homeowners’ Insurance ($300 and up) – This covers possible damages to your home. Your first year’s insurance is often paid at closing.
• Buyer’s Attorney Fee (not required in all states – $400 and up)
• Lender’s Attorney Fee (not required in all states – $150 and up)
• Escrow Deposit for Property Taxes & Mortgage Insurance (varies widely) – Often you are asked to put down two months of property tax and mortgage insurance payments at closing.
• Transfer Taxes (varies widely by state & municipality) – This is the tax paid when the title passes from seller to buyer.
• Recording Fees (varies widely depending on municipality) – A fee charged by your local recording office, usually city or county, for the recording of public land records.
• Processing Fee (up to $1,000) – This goes to your lender. It reimburses the cost to process the information on your loan application.
• Underwriting Fee (up to $795) – This also goes to your lender, covering the cost of researching whether or not to approve you for the loan.
• Loan Discount Points (often zero to two percent of loan amount) – “Points” are prepaid interest. One point is one percent of your loan amount. This is a lump sum payment that lowers your monthly payment for the life of your loan.
• Pre-Paid Interest (varies depending on loan amount, interest rate and time of month you close on your loan) – This is money you pay at closing in order to get the interest paid up through the first of the month.
• Property Tax (usually 6 months of county property tax)
• Wood Destroying Pest Inspection and Allocation of Costs - If required by the lender or buyer, the inspection generally runs up to $125.00.  Repairs can get expensive if eveidence of termites, dryrot or other wood damage is found.  example: Fumigation of a typical 1500 square foot house could run around $2,000.
• Home Owners Association Tranfer Fees - The Seller will pay for this transfer which will show that the dues are paid current, what the dues are, a copy of the association financial statements, minutes and notices.  The buyer should review these documents to determine if the Association has enough reserves inplace to avert future special assesments, check to see if there are special assessments, legal action, or any other items that might be of concern.  Also included will be Association by-laws, rules and regulations and CC & Rs.  The fee for the transfer varies per association ,but generally around $200-$300.

It is important to remember that you may qualify for a lender’s credit to make up for you having to come out of your pocket with any of these costs, but this is determined on a case-by-case basis. To get a free analysis of your specific situation, contact us by calling 800-311-6868.

http://www.acchomeloan.com

800-311-6868

If you have been sitting on the fence about buying a home or refinancing your current one. Now is the time to act.

…Losing Your Home…

This has been a real concern for a lot of people in recent years, so the question is: How can you set yourself up to best prepare to not have to give up the life and security that you have built for yourself and your family?

Here are some preparatory tips to keep you going strong:

1. If you are in an ARM, refi into a fixed rate: Sometimes and adjustable rate scenario can be good for you, but in most cases where you are not wanting to be surprised, it is better to get it fixed. Especially with us seeing the rates in the 3-4% range, this is a great idea right now.
2. Live within your means…drop the credit cards: We grew up living off of the allowance that our parents gave us, then we got jobs and lived off of the money we made. Then, we turned 18 and got those shiny little objects called credit cards and thus began our journey of saying, “I’ll just buy it on credit and then pay it off asap and I’ll be just fine”, not taking into account that next week we will find something else that we “need” and do the same thing again. Stop the cycle before it starts and stay away from the plastic! J
3. Make your payments on time…no excuses: A great man once said that whatever becomes acceptable becomes inevitable (Bob Donnell). This is a true statement. If you accept in your mind that making a late payment here and there is ok, then, chances are, you will eventually make a late payment. Resolve in your mind first that this is unacceptable and do whatever it takes to make the payments that you committed to.
4. Have emergency funds: This will solve the credit card question that I’m sure popped into your head on number 2. Credit cards are NOT for emergencies. Emergency savings’ are for emergencies. Start by saving up $1000 as a reserve for emergencies and you won’t have to dig out a credit card and pay for the emergency AND for the interest on the card.
5. Start smart: it’s not about what you qualify for, but what you can handle. When you are looking to buy a home, don’t just ask what the maximum amount is that you could qualify for. Instead, take a look at your finances and see how much of a house payment you could live comfortably paying, then let your mortgage consultant know. If you come up with that budget first, then you can avoid struggling with number 3 above. J

If  you are looking for advice on refinancing or buying a home, then give us a call at 800-311-6868 and we will be happy to answer your questions for you.

“With Us You’re Never A Loan”

We have all seen the increase in value and pricing on homes lately, but to see an increase this high is a good sign. The even better news is that we will continue to see these value increases throughout 2013.

Read more here: Annual Home Price Increase is Largest Since 2006

Ever wonder what it is that home-buyers want to know about the most? Maybe your a Real Estate Agent in Orange County or you are simply looking at purchasing a new home in Orange County and wondering what to look for. If so, here are the Top 5 things that new home-buyers usually look for:

1. Patio – This may not be the top focus, but it is definitely in the top 5. If you are selling a home with a patio, make sure to keep it looking nice and double check it for any structural issues. If you are looking at purchasing the home, look out for things like dry rot, mold, creaky boards and whether the patio has the potential to be affected by water.

2. Roof – Anyone who is serious about owning a home will take a look at the roof. Why? Because nobody wants a leaky roof, or worse. If you are selling your home, then you don’t have to do a complete renovation, but make sure that it looks structurally sound and if you notice any wet spots on the ceilings in your bedrooms, get it checked out. If you are looking to buy the home, look at the ceilings in the rooms, especially the top floor, if it is more than one story. If you notice an area with a dark ring around it, or you notice that the paint is a little raised up or the ceiling bows out a bit, it might be a good idea to take that into consideration.

3. Layout – Everyone has their preference on layout, but if you are selling a home, take into consideration what the current buying trends are considering layout and be able to help people who might be partial to a certain style. In this way, you can be better prepared to come up with solutions without tearing down walls and changing everything around. If you are buying a home, then sit down and determine what sort of layout you would like in a home. Do you want the kitchen and dining room to be separated by a partition or wall, or would you rather they flow together? Would you like a restroom attached to the master bedroom or would you rather have it down the hall? Solidify what you are looking for and it will help the process for you.

4. Indoor Decor – This is geared towards the Real Estate Agent and the home seller. When you are selling your home it is better to stick with neutral colors rather than the more eccentric colors. Your agent can help give you some insight into how you can stage your home to best sell, so employ their expertise and experience.

5. Infrastructure – This is the basic stuff like water, electricity, and heating. Make sure everything is in a good condition. No one wants to buy a house that has leaky or rusted pipes, light switches that are cracked or falling off the wall, or a heater or air conditioning that may need to be replaced in the near future. On that note, also keep in mind that the efficiency of the infrastructure is important as well. With the growing popularity of improving energy efficiency to save the environment and keep costs down, you may want to consider getting energy efficient modifications to your infrastructure and even look into things like solar paneling.

A final word to anyone selling a home (i.e. agents and/or sellers), as a general rule, make the home look the way you would want it to look if you were buying it for the first time. For buyers, take that time to sit down and figure out exactly what you are looking for in a home, then take off and go for it. Happy selling and happy house hunting!

Going into the weekend, here are some tips to help you with Time Management thanks to Ben Franklin:

•  Favor trusting relationships. Put your efforts into building relationships with people you can trust.
•  Set very few priorities and stick to them. Select a maximum of two things that are your highest priority and plan time to work on them first.
•  Turn down things that are inconsistent with your priorities. Get good at saying “no” to other people.
•  Set aside time for focused effort. Schedule time every day to work on just one thing.
•  Build solid processes. Set up processes that last and that run without your attention.
•  Break your goals into small units of work. Then think only about one unit at a time.

Get ready for next week and launch off with your new found Time Management skills!

Monday through Friday of last week caught us a little bit by surprise when rates jumped up from the lows that we have been seeing lately.

The best advice out there is if you haven’t taken a look at refinancing or your have been on the fence about whether to do it or not, your best bet is to look into it and see if you could get into a better rate and save yourself the regret later.

Give us a call and see what we can do for you today 800-311-6868

To read more on the story click HERE

In his blog that he posted recently titled, “Advice For Real Estate Agents (Quit Now!)” he highlights a couple important pieces of info:

1. Become the expert – micro-specialize: Become the person that people come to for advice on a specific area of your field, because you will even attract the people that may not want to contact you for anything else, but they know that you know the most about it.

2. Become the hub – open your office: Become the central hub for your city. Invite active clubs and organizations to hold meetings in an unused area of your office regularly.

3. Build on relationships - contact past clients: How many of the clients that you helped last year have you followed up with? 91% of all Realtors never contact the buyer or the seller of a home after the closing statistically. Don’t be the statistic.

We know that you value your clients and your relationships. If you do to the degree that we do, send us an e-mail or give us a call and start the conversation with us on how we can help each other help others in 2013.

To read more on Seth’s blog, you can visit him HERE

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