Hidden Costs When Buying a House

Hidden Costs When Buying a HouseYou’ve carefully planned your budget to buy a house. You may have checked out the prices for homes in your preferred neighborhood. While this is a great start, you also want to avoid being surprised by these often unexpected costs that are involved with many home purchases.

Home Inspections and Appraisals

Many lenders require you to get your home inspected before you sign the final papers. This inspection checks for major issues that impact the value of the home. For instance, a house with faulty electrical wiring poses a fire risk. A home appraisal also lets the lender know that the home is actually worth the selling price.

Closing Costs

These expenses often seem to be the most mysterious for first-time homebuyers. This is because they can vary according to the circumstances surrounding the home purchase. In most cases, you can expect to pay lender and title or attorney fees. You may also need to cover the cost of the interest that accrues between the time of closing and the beginning of the next month.

On average, you can expect to pay about two to three percent of your home’s value in closing costs, and even the small fees for notaries and other necessities add up. There are usually several options to cover these expenses. Some of these fees can be worked into seller concessions. Others may be rolled into your total loan. We can help you figure out which strategy for covering these costs is best for you.

Escrow

Hidden Costs When Buying a HouseThis expense can be lumped in with your closing costs, but it is worth exploring in greater detail. An escrow account contains a portion of the property taxes and insurance that is expected to be due for your house over a period of time. Lenders tend to require you to pay anywhere from three months to a full year of these expected payments.

An escrow account benefits you by using a portion of your mortgage payments to cover the insurance and taxes. Certain types of loans, such as an FHA loan, typically require you to have an escrow account.

Property Taxes

Property taxes are easy to overlook, since they tend to get added to your mortgage payments as part of the escrow account. However, you need to think about this expense if you are not setting up an escrow fund. You will also need to think about any potential increases that could occur with the valuation of your property over the next year or two. In some cases, supplemental taxes can be assessed that you need to cover after your home purchase.

Private Mortgage Insurance

Hidden Costs When Buying a HouseLenders require you to pay private mortgage insurance (PMI) whenever you don’t have enough of a down payment to give you at least 20% equity in your home. You may be eligible for a loan that allows you to put less money down while still avoiding PMI. You can also drop this insurance once you achieve enough equity in your home to satisfy the lender’s requirements.

There are many factors that influence the potential additional fees that you face when you buy a house. In some cases, we can help you overcome extra expenses through seller concessions and special types of loans. Remember to explore all of your options for offsetting hidden costs, so that you can maximize the home you can buy with your budget.

Jimmy Vercellino is an experienced Phoenix mortgage lender. He and his team work hard to provide a timely, efficient and excellent home loan process for buyers. As a loan specialist, Jimmy manages the entire process for his clients, making the home buying experience a pleasure instead of filled with stress.

The Vercellino team operates a boutique-style mortgage branch with a specific culture centered around “serving families”. He is able to originate loans in 46 states and his bank maintains a full line of conventional, government (FHA and VA) and jumbo loan products. He has received several loan production awards including National Top 1% Mortgage Broker Award.


Phoenix Home Loans – We Make it Easy

Phoenix Home Loans - We Make it an Easy Process

The process involved with getting a loan for your new home is complicated. For a first-time home buyer, just trying to understand the differences between each type of loan gets confusing.

If you have bought a home before, then you are also likely to be surprised by just how much has changed, since the requirements to get a loan are constantly being updated.

The Jimmy Vercellino Team stays up-to-date on all the latest information, so that we can guide you each step of the way toward obtaining the best mortgage loan and help you meet your goals for home ownership.

Determining Which Type of Home Loan Is Best

There are several different types of Phoenix home loans that you can get, and they all have specific benefits and requirements that you need to understand.

For instance, an FHA loan typically requires a lower down payment than a conventional loan, which can make this type of loan ideal for a first-time home buyer.

VA loans offer benefits for military members and their families, yet they do have restrictions in place that limit the size of the loan that you can get.

We will help you sort through each one of your options to find the type of loan that works best with your financial and personal situation.

Assistance with Submitting Your Documentation

All mortgage lenders require you to submit important information to document your identity as well as your current financial status.

Veterans who are applying for Phoenix home loans will also need to submit additional information such as the Certificate of Eligibility (COE) form.

Our team understands that paperwork is one of those tedious necessities that generate stress for people applying for home loans, so we do everything we can to assist with this part of the process.

For instance, we can help you request the COE form, or send you a reminder to send in a pay stub, so that you don’t miss a critical step that delays your application decision.

Understanding Complicated Loan Terms

While you may know some basic terminology regarding how Phoenix home loans work, it is also common to feel as though you’re in over your head once you start to discuss the actual loan with a lender.

For instance, you may not know what escrow is or if you need to pay private mortgage insurance. Professional loan officers know how to break down complicated terminology and mathematical figures so that it all makes sense.

Knowing Exactly What You Are Signing

At some point, you have probably heard of someone you know signing on a loan without fully understanding the terms.

One of our biggest goals is to make sure that you never get surprised by something, such as a prepayment penalty or interest rate increase.

We walk you through each part of your loan and are always willing to answer your questions – you can sign your new home loan agreement with confidence.

We believe that the excitement of buying your first home should never be overshadowed by the stress of applying for a loan. We are truly dedicated to ensuring the process of getting a mortgage loan is smooth sailing.