In need of your real estate help!

[thetreble 19]

Hey Guys and Gals,

As some of you know, my hubby and I have been looking to purchase a home. We thought we had enough money saved up but us as first time home buyers and not thinking about closing costs, I didn't realize how much they were. I went on the Chase site, our potential lender, to get a rough estimate and they are giving me about $6,500 to 7 respectively for closing costs.

Do any of you know which of the CC are negotiable from your experience?

Also, can someone with a real estate brain explain to me what "points" mean on a mortgage!

Thanks in advance.

[payxibka 10,045]

Hey Guys and Gals,

As some of you know, my hubby and I have been looking to purchase a home. We thought we had enough money saved up but us as first time home buyers and not thinking about closing costs, I didn't realize how much they were. I went on the Chase site, our potential lender, to get a rough estimate and they are giving me about $6,500 to 7 respectively for closing costs.

Do any of you know which of the CC are negotiable from your experience?

Also, can someone with a real estate brain explain to me what "points" mean on a mortgage!

Thanks in advance.

A "point" is 1% of the mortgage amount... Usually 1-2 point(s) is paid to the lender for there services and sometimes additional points can be used to "buy-down" the interest rate from current "market".

[Krikit 1,164]

You can ask the seller to cover all or part of the closing costs. Or you can lower your offer and say that you'll cover all or part of the closing costs. I was shocked to see how much closing costs are here. Plus I was shocked to discover that both the agents sit in on your discussion with the lawyer, and how much is disclosed to them. It's crazy.

[Flames9_RN 358]

http://www.homeloancenter.com/MortgageHelp...geRates101.aspx

You can ask the seller to pay your closing costs or help you with them, its all part of the contract, and the seller can say NO, yes, or they will say we will pay up to a certain $$$$ amount. In a buyers market, the seller is more likely to negotiate, of course in a sellers market, not so likely!!

[Gypsyangel 11]

We bought a house in September and I was surprised at closing costs as well. I think ours were about $7k-$8k. The process is so different in the US. vs Canada. We had to bring a certified check or money order to settlement which included our downpayment and an extra chunk of change for closing costs. They give you an estimate on settlement day of what they want you to bring and if, at the end of the day, you brought too much they write you a check right at the table for the overage. Weird.

We tried to keep our costs down as much as possible, but we couldn't find that much to negotiate on, though everyone recommends that you negotiate. Our sneaky mortgage company tried to make us pay our taxes for the full year at settlement, which drove closing costs way up. Even the deed company said this was ridiculous and we ended up paying 2 months. So that's one thing to watch out for.

The seller of our house had already reduced the price of the house so much that they werent' willing to pay closing costs as well.

The other thing is that we had to buy a year's worth (in advance) of insurance on the house and bring proof of that to settlement. That was around $750 on top of everything else.

I found it a way more stressful process than the process I went through in Canada.

[MsZ 6]

I've heard tell of being able to roll closing costs into the mortgage loan, but I don't know how doable that would be now with banking the way it is.

[thetreble 19]

I've heard tell of being able to roll closing costs into the mortgage loan, but I don't know how doable that would be now with banking the way it is.

I asked the bank about that yesterday. The lender told me that they only do that if you are re-financing the home. That didn't make any sense to me but I thought I'd ask him regardless.

Gypsy- where did you buy your home in NJ?

I'm actually very worried about this whole thing. haha Hopefully I can negotiate with the seller to pay some closing costs because it is a buyer's market right now. But I guess we will see.

The problem I am having is that I was told not to get a point on the mortgage because interest rates were good and you end up paying the bank more than what you would end up paying with a higher interest rate. Now, with no points, I'm looking at like 7.25% as an interest rate. It still might be cheaper in the long run to take the higher interest rate instead of paying 2-3K extra in closing costs. I'd have to work those numbers out.

I just am feeling a little pressure from my agent right now to put in an offer on a house that I think may be too much money for us. I know you can't let them pressure you but they can be very convincing. I guess they are salespeople after all.

Edited October 16, 2008 by thetreble

[trailmix 77]

I've heard tell of being able to roll closing costs into the mortgage loan, but I don't know how doable that would be now with banking the way it is.

I asked the bank about that yesterday. The lender told me that they only do that if you are re-financing the home. That didn't make any sense to me but I thought I'd ask him regardless.

Gypsy- where did you buy your home in NJ?

I'm actually very worried about this whole thing. haha Hopefully I can negotiate with the seller to pay some closing costs because it is a buyer's market right now. But I guess we will see.

The problem I am having is that I was told not to get a point on the mortgage because interest rates were good and you end up paying the bank more than what you would end up paying with a higher interest rate. Now, with no points, I'm looking at like 7.25% as an interest rate. It still might be cheaper in the long run to take the higher interest rate instead of paying 2-3K extra in closing costs. I'd have to work those numbers out.

I just am feeling a little pressure from my agent right now to put in an offer on a house that I think may be too much money for us. I know you can't let them pressure you but they can be very convincing. I guess they are salespeople after all.

You already know this Amanda - but i'm going to say it anyway

If you aren't comfortable with the payments you are going to have to make, then don't do it - there are lots of houses out there.

That said - as far as the closing costs go - perhaps you could work it out this way (assuming they allow such things in the U.S. - you can do it in Canada).

A cash incentive for you to buy a house. Does the house need some repair for instance?

You offer the sellers $whatever - plus you want 8 thousand back for repairs (new roof?) or updating or whatever. You might have to boost up the offer/your mortgage for this:

Price you are offering: $100,000

Plus 8 thousand

So basically you say you will give them $108,000 if they give you cash back at closing for the roof replacement or whatever.

At closing they then issue you a cheque for 8 thousand. The 8 thousand is now part of your mortgage.

[thetreble 19]

I have thought about that, ya know...Doing something where we say we offer you $110,000 (originally 100,000) to boost up the mortgage but that we want that extra 10 paid back to us for the closing costs.

As a first time home buyer, it is all scary to me. This is one of the biggest investments I will make in my life time. It's not like a car, ya know?

Bah. There are so many houses out there..how can I know which is the right one?

[trailmix 77]

I have thought about that, ya know...Doing something where we say we offer you $110,000 (originally 100,000) to boost up the mortgage but that we want that extra 10 paid back to us for the closing costs.

As a first time home buyer, it is all scary to me. This is one of the biggest investments I will make in my life time. It's not like a car, ya know?

Bah. There are so many houses out there..how can I know which is the right one?

It is a lot of money no doubt, but basically buying a house is no different than buying a sofa, for instance. You just ask yourself - can we afford it and do we want it - if you answer yes to both of those (with confidence) then go for it.

When you have found the right house - you will know.

When we sold our house in Calgary we did give the buyers $4000 - as we did not replace the roof. Driving by the house a year later, still had the same old roof

I'm sure it's done all the time

[Krikit 1,164]

Trailmix, did you save that link I sent you to foreclosed properties for sale? I'm thinking that might be useful to her.

[thetreble 19]

Yes! Please send me any info you can. The only thing I worry about foreclosers is that back taxes and the like might be owned on them and would I have to pay those?

[Krikit 1,164]

Yes! Please send me any info you can. The only thing I worry about foreclosers is that back taxes and the like might be owned on them and would I have to pay those?

This link pretty much states that foreclosed properties are conducted and finalized by the bank and there are no liens attached. But that's a really good question that I would ask your agent and/or real estate lawyer.

[Krikit 1,164]

I'm still looking for that really good foreclosed properties for sale site, but here's another interesting one.....

DomuSwap - NJ

[Krikit 1,164]

I really like this site for its setup: Zillow

I can't find that foreclosure site I was referring to. Hopefully, Trailmix bookmarked it. I'm such a loser.