Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a home. They include upfront loan points, title insurance, escrow or closing day charges, document fees, prepaid interest and property taxes. Unless, these charges are rolled into the loan, they must be paid when the home is closed.
Immediately contact the U.S. Department of Housing and Urban Development (HUD) if you ever feel excluded from a neighborhood or particular house. Also, contact HUD if you believe you are being discriminated against on the basis of race, color, religion, sex, nationality, familial status, or disability. HUD's Office of Fair Housing has a hotline for reporting incidents of discrimination: 1-800-669-9777.
Always check to see if the house is in a low-lying area, in a high-risk area for natural disasters (like earthquakes, hurricanes, tornadoes, etc.), or in a hazardous materials area. Be sure the house meets building codes. Also consider local zoning laws, which could affect remodeling or making an addition in the future. Your real estate agent should be able to help you with these questions.
A lower interest rate allows you to borrow more money than a high rate with the same monthly payment. Interest rates can fluctuate as you shop for a loan, so ask lenders if they offer a rate "lock-in" which guarantees a specific interest rate for a certain period of time. Remember that a lender must disclose the Annual Percentage Rate (APR) of a loan to you. The APR shows the cost of a mortgage loan by expressing it in terms of a yearly interest rate. It is generally higher than the interest rate because it also includes the cost of points, mortgage and other fees included in the loan.
To ensure you won't fall victim to loan fraud, be sure to follow all of these steps as you apply for a loan: Be sure to read and understand everything before you sign. Refuse to sign any blank documents. Do not buy property for someone else. Do not overstate your income. Do not overstate how long you have been employed. Do not overstate your assets. Accurately report your debts. Do not change your income tax returns for any reason. Tell the whole truth about gifts. Do not list fake co-borrowers on your loan application. Be truthful I about your credit problems, past and present. Be honest about your intention to occupy the house. Do not provide false supporting documents.
A seller disclosure form can give you an idea of potential problems, but it should never be considered a substitute for a professional home inspection. Sellers may overlook problems, and often not be aware of them. It's smart to use the disclosure as starting point, but hire a pro to get the whole story.
If you are taking cash out of a refinancing and/or folding the closing costs into the new loan, watch the loan-to-value ratio of the new mortgage. If it's above 80 percent, you will have to purchase private mortgage insurance, the added cost of which may make the refinancing less attractive.
A standard homeowners policy protects against fire, lightning, wind, storms, hail, explosions, riots, aircraft wrecks, vehicle crashes, smoke, vandalism, theft, breaking glass, falling objects, weight of snow or sleet, collapsing buildings, freezing of plumbing fixtures, electrical damage and water damage from plumbing, heating or air conditioning systems. Such policies are "all-risk" policies, which cover everything except earthquakes, floods, war, and nuclear accidents.
You can get information about school systems by contacting the city or county school board or the local schools. Your real estate agent may also be knowledgeable about schools in the area.
Your real estate agent will assist you in making an offer, which will include the following information: Complete legal description of the property; Amount of earnest money; Down payment and financing details; Proposed move-in date; Price you are offering; Proposed closing date; Length of time the offer is valid; Details of the deal. Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just making an offer.