Let’s face it, purchasing a
home can be expensive and for those who are first time homeowners, cutting down
on expenses and saving to purchase a home can be a big deal. However, they are
often shocked to find out that at the time of the purchase, they not only have
to put down a down payment for the home but also have to pay up in closing costs. This cost can actually add
up to additional thousands of dollars in cash that you need to pay upfront.
Homeowners have the option to either pay upfront or go for a no closing cost mortgage loan.
Is A No Closing Cost Mortgage Loan Suitable For You?
That’s a question that really
depends on you and your needs – whether you want to pay the amount up front or
would you rather pay overtime and use that money on other necessities? Would
you rather go for a minimum amount upfront or prefer a lower monthly interest
rate and monthly payments instead?
Of course, when you decide to
go with a no closing cost mortgage loan,
it doesn’t really provide you with a free pass – nope, just like nothing in
life is free, your no closing cost
mortgage loan also comes at a price and that is in the form of higher
monthly mortgage payments.
Let’s take a closer look at
how a no closing cost mortgage loan really
works through an example: Although closing costs vary from region to
region, the general range is between 2-3% - which means that if your loan
amount is of around $150,000 and your closing costs come to around 2.5%, then
the total cost of closing that you will have to pay would be $3750.
These closing costs may or may not include the following:
·
Appraisal
fee
·
Application
fee
·
Flood
certification
·
Recording
fees
·
Attorney
fees
·
Survey
·
Home
inspection
·
County/state/municipal
taxes
·
Title
insurance
However, it’s important to
note that the amount of closing costs is not calculated as a percentage –
rather at the time of the deal, there are wide variety of fees that you have to
pay that when added up, can amount to around 2-3% of your loan amount.
Check our Buying or Selling a House Video
Check our Buying or Selling a House Video
No comments:
Post a Comment