How to properly save for closing costs, so they don't catch you by surprise.

Income Required

How Total Quality Lending is different.

Closing Costs Breakdown

As a new homebuyer, you’ll face a lot of upfront expenses when you purchase a home.  The key is to understand what exactly these costs account for and how you can properly plan and budget for them.  A study by the U.S. News and World Report found: Nearly 40% of homebuyers were surprised by their closing costs when nearing the close of their purchase but understood the basic fundamental need of a down payment. View some helpful information below that will allow you to plan ahead and not get shocked when it’s time to close.

How to Stop paying for Mortgage Insurance

The main reason people are shocked about their closing costs is that they lack the initial education of what it is and what they cover.  Closing costs are a collection of fees and payments made to a variety of individuals and organizations involved with your organization. This is why connecting with one of our trusted team members who focus on educating you first, leads to less hiccups down the road.

 In other words, closing costs typically include whats listed below:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting Fees

What is Required to Budget for Closing Costs?

Understanding closing costs is the first step, but knowing what is exactly required is to budget for is critical to achieving your homebuying goals.  Based on data from Freddie Mac, costs are typically between 2% and 5% of the total purchase price of your home.  

Here’s an example of what you’ll need to cover your closing costs:

Let’s say the home cost was $350,000.  Based on the 2-5% estimate your closing costs fees could be near $7,000 – $17,500. (Remember this is just for this home price)

The Best Ways to Be Prepared at Closing Time

When you start your homebuying journey take the time to get a sense of all costs involved – from your down payment to closing costs.  But do this with one of our trained financial advisors.

Conclusion

In today’s high intensive market it is key to understand and make sure your budget includes all fees and payments associated with closing.  Work with our team to ensure you save time and avoid fallout in the homebuying process.

Sergio Eulloqui

Loan Consultant

NMLS# 2012847

Mobile: (714) 787-8279

Emal: seulloqui@tqlend.com

Leave a Reply

Your email address will not be published.

Get in Touch

    [anr_nocaptcha g-recaptcha-response]

    By entering your contact information, you are providing express written consent for Total Quality Lending to contact you at the email and number you provided via telephone, mobile device, automated means like autodialing, text SMS/MMS and pre-recorded messages, even if you are registered on a corporate, state, or federal Do Not Call list. You are also acknowledging and agreeing to our terms of service and privacy policy. Consent is not required to use our services.

    In no event will Total Quality Lending be liable for any loss or damage including and without limitation to indirect or consequential loss or damage, or any loss or damage whatsoever arising out of, or in connection with, the use of this website. This is not an offer for extension of credit nor a commitment to lend. Programs, rates, terms and conditions subject to change without notice. Certain restrictions may apply. All approvals subject to underwriting guidelines. Not all applicants will qualify.
    Total Quality Lending NMLS # 1933377. Licensed by the Department of Financial Protection and Innovation under the California Financing Law.
    These materials are not from HUD or FHA and were not approved by HUD or a government agency.
    Equal Housing Lender. Licensed by the Department of Financial Protection and Innovation under the California Financing Law, License No 60DBO-108369, Licensed by the Department of Financial Protection and Innovation under the California Financing Law, NMLS #1933377. Loans made or arranged pursuant to the Department of Financial Protection and Innovation under the California Financing Law.

    Copyright © 2021 Total Quality Financial, Inc. DBA Total Quality Lending. All Rights Reserved.

    Private mortgage insurance (PMI) may add to your monthly mortgage expenses, but it can help you get your foot in the homeownership door. When you’re buying a home, check to see if PMI will help you reach your goals faster.  We can help you compare options — that way you can receive the best rate and terms for your specific financial situation.

    How to stop paying PMI:

    • Build equity in your home over time. Your mortgage servicer is legally required to stop charging PMI premiums once your balance hits 78 percent of the original loan. (Note, this does not apply to FHA loans. You can only cancel FHA MIP if you put down at least 10 percent on your home and when you reach the 11-year mark in your repayment schedule.)
    • Contact your servicer when you have 20 percent equity. You can press fast-forward on that automatic PMI cancellation when your balance reaches 80 percent of the original loan. At this point, you can request to cancel PMI.
    • Get your home appraised. Reaching that magic 20 percent equity marker doesn’t just involve paying down your principal over time. If your home’s value has appreciated since you purchased it, you can contact your lender to request a professional appraisal. According to HomeAdvisor, an appraisal will cost around $350 — a small price that can quickly be recouped after a few months of cheaper payments.
    • Refinance your mortgage. Refinancing your mortgage is another option that will include an appraisal. This process costs quite a bit more, but it can make sense if your original mortgage had a high-interest rate. Use our finance calculator to estimate if refinancing is the right move for you.