A new home is one of the most significant expenses you’ll ever incur, especially if it’s your first home or your first refinance. A mortgage situation can be complex and stressful, which is why the brokers at City Creek Mortgage are here to walk you through any roadblocks that may come up along the way.
Several of these roadblocks can be financial, and an unprepared applicant here might be in for a rude awakening. Here are a few important cost-related items we often advise our clients on before an error causes a delay in the process.
Closing costs, which include everything from appraisal and underwriting fees to property taxes and mortgage insurance (among several other things), can be a much larger expense than many people expect. They often range from anywhere between 2 to 5 percent of a total purchase price – for a home that costs $300,000, that’s between $6,000 and $15,000 in additional expenses.
You won’t know the exact details on these costs until you receive a Good Faith Estimate, or FGE, from your lender. In addition, these costs can change after the GFE is sent. Some closing costs are negotiable, though, and with the proper disclosure requests, you can stay ahead of closing costs.
The actual moving day may seem like a minor expense, but this often isn’t the case. These expenses include utility deposits, cleaning supplies, appliances that aren’t included in the purchase, and any pre-move-in upgrades. Try to get estimates for these kinds of things well in advance, and leave a cushion in your budget for unexpected items that will inevitably come up.
An extra chunk of cash is absolutely vital during the home loan process. Several different glitches may take place and throw off the entire process. For example, an appraisal that’s off by a few thousand dollars could create significant price discrepancies – but there are cases where paying this extra will be fully worth it for you based on market conditions and cash on hand. This is one area where an agent with expertise in the field can be of major service.
Want to learn more about hidden costs in the mortgage realm, or any of our other services? Contact the brokers at City Creek Mortgage today.