What is Included in the Closing Costs?

by seacoast_ashley 2. February 2014 05:34

When you obtain a mortgage, you need to pay fees - charged by lenders and third parties – related to the purchase of the home. These fees are called closing costs and are included on top of the cost of the home and down payment.

Closing Costs - House Calculator

Here is a list of common closings costs:

  • Credit Report Processing Fee
  • Loan Origination Fee (for processing loan paperwork)
  • Costs of Inspections (Termite, Home, etc.)
  • Appraisal Fee
  • Survey Fee
  • Property Taxes
  • Private Mortgage Insurance
  • Prepaid Interest
  • Prepaid Insurance
  • Discount Points
  • Title Insurance
  • Title Search
  • Escrow Deposit
  • Notary Fee
  • Courier Fee
  • Wire Fee
  • Underwriting Fees
  • Government Recording Fees

Closing costs typically run about 2-4% of the purchase price. So, if you purchase a home for $300,000, closing costs will run between $6,000-$12,000.

Within 3 days of applying for a loan, lenders are required by law to give borrowers a Good Faith Estimate (GFE). The GFE will list all of your closing costs, but these may change by the time of closing. Legally, they are allowed to change by 10%, so it’s important you take that into account when budgeting your purchase.

Before you sign the papers on your home, you will receive a HUD form that lists all of the fees to be paid. If the closing costs are higher than you expected and can afford, you can walk away from the deal. But, be warned, you will likely lose money, especially your earnest money.

If you are concerned about paying extra out of pocket for the closing costs, there are mortgage programs that do not require you to pay them. In this case, the lender will either raise the interest rate or fold the costs into the total purchase price of the home. Make sure you discuss this with your mortgage consultant.

If you have any questions about closing costs, ask your Sea Coast agent or mortgage consultant. Don’t have an agent, find one today.

Meghan Riley

First Steps to Approaching a Home Loan

by seacoast_ashley 29. August 2011 02:57

While you may think being approved for a loan is one of the last steps in the home-buying process, any real estate agent will tell you that is not true. It is necessary for you to assess your specific situation before you begin shopping seriously for Jacksonville, NC homes for sale.

It is the job of a mortgage broker to tell you how much you can afford to spend on a home. There are several ways they go about evaluating this information. A mortgage broker or lender will better determine how much you can afford to spend by assessing:

  • Credit issues

  • Income (salary, bonuses, commissions)

  • Tax returns

  • Assets

  • Employment history

Helping you determine the range of money you are qualified to borrow will help you and your real estate agent get a better idea of the price range you can shop in. It will not be beneficial for you to look at homes that are outside of your price range, because it will only make the homes in your price range seem less desirable.

Your real estate agent will also benefit from finding out your exact price range before you start shopping. They will be able to start immediately finding houses that suit your tastes and your price range so you can find your dream Wilmington, NC real estate faster than you had hoped.

Ask friends for a solid reference and only meet a mortgage broker or lender that you feel comfortable with. Often times, people see the mortgage lender as the bad guy, when in reality it is their number one priority to help you find a home that you can afford.

Want to learn more about taking the first steps to approaching your home loan? Watch this Sea Coast Realty video from Chris Hutchens, an Alpha Mortgage professional.

When you’re ready to start the search for your Jacksonville, NC new home, contact the real estate professionals at Sea Coast Realty.

What You Need to Know About Home Foreclosures

by seacoast_ashley 23. August 2011 02:51

You’ve seen those late-night commercials that say you can buy beautiful foreclosed homes for only hundreds of dollars. While that might seem like an ideal situation, there may be some things you should be aware of before you enter the foreclosure arena.

What Are Courthouse Foreclosures

Buying a foreclosed home from the courthouse may be an inexpensive alternative to buying a new home, but it also means you are responsible for paying any existing leans on the house and many times you can’t even look inside the home until after you purchase it. Buying a home like this requires extensive research and a solid understanding of how the process works. In many cases, purchasing a foreclosure this way also requires a leap of faith.

What Are Bank-Owned Foreclosures

A bank-owned foreclosure is a foreclosed home that was actually bought back by the bank. When shopping for a bank-owned property it is important for you to consider the condition of the home, because the bank won’t do any repairs before putting the house up for sale. Many foreclosures are in a state of disrepair that can range from cosmetic fixes to major necessary repairs. While this is a much easier way to purchase a foreclosed home, it still requires a fair amount of research.

What Else You Should Know

The important thing for you to understand when considering a foreclosure is that it can be risky business if you are not properly informed and prepared. Choose a real estate agent that offers experience with foreclosures to help ensure you get the best deal on your Jacksonville, NC real estate.

While foreclosures make up a large portion of the listings in many areas, it can require patience on your end to find one that matches your needs, budget and taste. By using your head and staying informed about the market, you can actually make a successful foreclosure transaction.

Want to learn more about foreclosures? Watch our video of a Sea Coast Realty real estate agent telling you what you need to know about foreclosures.

How Realtors Improve the Home-Buying Experience

by seacoast_ashley 15. August 2011 02:46

The number one goal of a trained Realtor is to improve the home-buying experience for a buyer and a seller.

If you are an inexperienced home-buyer, why wouldn't you want the guidance and support of a trained professional with years of experience? There are so many aspects that go into the home-buying process that you may not be aware of or fully understand.

A professional real estate agent can help you understand and narrow your options, while also helping you to negotiate the best deal. A professional real estate agent can also:

Determine your buying power

A real estate agent can help you identify how much you can afford to spend on a home. Taking into consideration your borrowing capacity and available financial reserves, a real estate agent can help you narrow your selection and find a home that suits your means.

Access additional resources to find your home

Real estate agents have access to Jacksonville or Wilmington, NC real estate that may not be actively advertised on the market. Your agent could have access to a variety of properties that you didn't even know were out there.

Assist in the selection process

Realtors have access to a variety of informational resources that can assist you in making a better decision about your future home. Real estate agents have access to facts on zoning, schools, utilities and other valuable information that could help you make a more informed decision.

Help you negotiate

If you are an inexperienced home-buyer, it could be helpful to have a professional on your side. When you have found the Jacksonville, NC home for sale that you want to purchase, you need to ensure you negotiate effectively. A real estate agent can help you negotiate things such as price, financing, terms and date of possession.

Choose a real estate agent you can trust. Contact the professional real estate agents at Sea Coast Realty today.

Tips for First-Time Home Buyers

by seacoast_ashley 24. May 2011 02:11

Being a first-time home buyer is exciting. Browsing Wilmington, NC new homes to find the perfect place to start your life is special.

While you may be overwhelmed with excitement, you may also be overwhelmed with anxiety. By following these helpful tips, you can take some of the stress and anxiety out of the home-buying process:

  • Pay off your debts – Before you buy your first home, evaluate your current debts and do everything you can to pay them off. The less money you owe on cars, school loans and large purchases, the more money you will have available for your new home.

  • Check your credit – When trying to qualify for a loan, your credit score is one of the most important contributing factors. Get a credit report so you have a better idea of what lenders will be looking at when considering you for a loan.

  • Find out exactly what you can afford – Calculate potential mortgages to estimate what your payments may be. Try out different prices until you find a range where you feel comfortable.

  • Understand what loans are available to you – Do research and meet with your bank to find out what types of loans are available to you. Ask about FHA loans, Fannie Mae loans and any available private loans.

  • Get pre-qualified – Being pre-qualified for a loan will make the home-buying process much easier. This can help you narrow the range of homes that you are interested in, and help you get a better understanding of exactly what you can afford. If you are pre-qualified, your offer will be taken more seriously than someone that hasn’t spoken to a lender.

  • Calculate your down payment – Taking into consideration the money you have saved and other programs that can assist with your down payment, decide on a figure that is manageable for you.

Be an educated home buyer. Do your research and find the perfect Jacksonville, NC real estate for you. Use all the resources available to you as a first-time home buyer and enjoy this special time in your life.

What to Avoid When Buying a Home

by seacoast_ashley 21. January 2011 02:11

If you are thinking about purchasing a home, there are some major things you will want to avoid. While some of them may seem like common sense, it can never hurt to see them in writing.

Don’t Move Money Around

When a lender reviews your loan package for approval, one of the things they are most concerned about is the source of funds for your down payment and closing costs. Most likely, you will be asked to provide statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts.

If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them. The mortgage underwriter (the person who actually approves your loan) will probably require a complete paper trail of all the withdrawals and deposits. You may be required to produce cancelled checks, deposit receipts, and other seemingly inconsequential data, which could get quite tedious and stall progress.

The Effect of Changing Jobs

For most people, changing employers will not really affect your ability to qualify for a mortgage loan, especially if you are going to be experiencing an increase in pay. For some homebuyers, however, the effects of changing jobs can be disastrous to your loan application.

For salaried employees, it is only beneficial to switch jobs if you will be earning a higher salary. Otherwise, changing positions won’t really affect your mortgage.

For hourly employees, as long as you work around forty hours a week without over-time, your job shouldn’t create any problems.

For commissioned employees, it is important not to change jobs before purchasing a new home. Since changing employers can create uncertainty about your future earnings, it could negatively impact your ability to buy a home. This has to do with how mortgage lenders calculate your income. They average your commissions over the last two years.

For part-time employees, if you earn an hourly income but rarely work forty hours a week, you should not change jobs. There would be no way to tell how many hours you will work each week on the new job, so no way to accurately calculate your income. If you remain on the old job, the lender can just average your earnings.

Avoid Major Purchases of Any Kind

Making major purchase right before you go to get a loan for a new home may not be the wisest decision. Should you buy that motorcycle you have had your eye on? No. Should you splurge on a vacation to a private island? Probably not.  What about that 60” LED TV for Sunday’s football game? Uh-uh. You are going to want to avoid making any major purchase that would create additional debt of any kind.

Keep your goal of purchasing Jacksonville NC real estate in your mind at all times. It will keep you from making impulse purchases and ruining your chances of getting a loan. Contact Sea Coast Realty today to start searching for Wilmington NC homes for sale.

Buying a New Home: The Best Investment

by seacoast_ashley 17. January 2011 02:17

When is the right time to purchase a new home? While having your finances in order is a major factor, it can still be challenging to know when it is the right time to make such a large purchase.  Understanding the financial benefits of purchasing a new home may help you realize, the right time is right now!

Return on Investment

As a general rule, homes tend to appreciate at about five percent each year. Some years this figure will increase, some years it will decrease. The figure can also vary depending on the neighborhood and region you choose to reside in.

While five percent probably doesn’t have you jumping out of your chair, it may be beneficial for you to take a second look…

Imagine if you bought a $200,000 home, odds are you didn’t pay cash. Instead, you got a mortgage. Supposing you put as much as twenty percent down - that would be an investment of around $40,000.

At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you would have earned $10,000 on an investment of about $40,000. Your annual "return on investment" would be a whopping twenty-five percent!

Of course, with a new home you are making mortgage payments, paying property taxes and paying for a variety of other miscellaneous costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase.

The rate of return on your Jacksonville NC new home or Wilmington NC real estate would be higher than almost any other investment you could make.

Income Tax Savings

Understanding your income tax savings can help you better comprehend how investing in a new home is practical. Because of income tax deductions, the government is basically subsidizing your purchase of a home. All of the interest and property taxes you pay in a given year can be deducted from your gross income to reduce your taxable income.

For example, assume your initial loan balance is $150,000 with an interest rate of eight percent. During the first year you would pay $9969.27 in interest. If your first payment is January 1st, your taxable income would be almost $10,000 less - due to the IRS interest rate deduction.

Not to mention, property taxes are deductible, too. Whatever property taxes you pay in a given year may also be deducted from your gross income, lowering your overall tax obligation.

Forced Savings

If you are thinking, but I’m lousy at saving money, you aren’t alone. Many people struggle with saving money, but by investing your money wisely in a new home, it can be like creating an automatic savings account. Your savings will accumulate in two major ways. Every month, a portion of your house payment goes toward the principal. Admittedly, in the early years of the mortgage, this is not very much. However, over time it begins to accelerate.

Secondly, your home appreciates. While the rate from year to year will vary slightly, your home will appreciate approximately five percent per year. History has shown that over time, owning a home can be one of the best financial investments an individual can make.

How do you begin searching for your dream home? Contact Coldwell Banker Sea Coast Realty to learn about Topsail Island realty, Wrightsville Beach homes and real estate in the North Carolina counties of New Hanover, Brunswick, Pender and Onslow.

Find the Home Loan that Fits Your Needs

by seacoast_ashley 21. October 2010 08:35

Article From BuyAndSell.HouseLogic.com

By: G. M. Filisko

Published: February 10, 2010

Understand which mortgage loan is best for you so your budget is not stretched too thin.

It's easier to settle happily into your new home if you're confident you can afford it. That requires that you understand your mortgage financing options and choose the loan that best suits your income and ability to tolerate risk.

The basics of mortgage financing
The most important features of your mortgage loan are its term and interest rate. Mortgages typically come in 15-, 20-, 30- or 40-year lengths. The longer the term, the lower your monthly payment. However, the tradeoff for a lower payment is that the longer the life of your loan, the more interest you'll pay.

Mortgage interest rates generally come in two flavors: fixed and adjustable. A fixed rate allows you to lock in your interest rate for the entire mortgage term. That's attractive if you're risk-averse, on a fixed income, or when interest rates are low.

The risks and rewards of ARMs

An adjustable-rate mortgage does just what its name implies: Its interest rate adjusts at a future date listed in the loan documents. It moves up and down according to a particular financial market index, such as Treasury bills. A 3/1 ARM will have the same interest rate for three years and then adjust every year after that; likewise a 5/1 ARM remains unchanged until the five-year mark. Typically, ARMs include a cap on how much the interest rate can increase, such as 3% at each adjustment, or 5% over the life of the loan.

Why agree to such uncertainty? ARMs can be a good choice if you expect your income to grow significantly in the coming years. The interest rate on some-but not all-ARMs can even drop if the benchmark to which they're tied also dips. ARMs also often offer a lower interest rate than fixed-rate mortgages during the first few years of the mortgage, which means big savings for you-even if there's only a half-point difference.

But if rates go up, your ARM payment will jump dramatically, so before you choose an ARM, answer these questions:
•How much can my monthly payments increase at each adjustment?
•How soon and how often can increases occur?
•Can I afford the maximum increase permitted?
•Do I expect my income to increase or decrease?
•Am I paying down my loan balance each month, or is it staying the same or even increasing?
•Do I plan to own the home for longer than the initial low-interest-rate period, or do I plan to sell before the rate adjusts?
•Will I have to pay a penalty if I refinance into a lower-rate mortgage or sell my house?
•What's my goal in buying this property? Am I considering a riskier mortgage to buy a more expensive house than I can realistically afford?

Consider a government-backed mortgage loan

If you've saved less than the ideal downpayment of 20%, or your credit score isn't high enough for you to qualify for a fixed-rate or ARM with a conventional lender, consider a government-backed loan from the Federal Housing Administration or Department of Veterans Affairs.

FHA offers adjustable and fixed-rate loans at reduced interest rates and with as little as 3.5% down and VA offers no-money-down loans. FHA and VA also let you use cash gifts from family members.

Before you decide on any mortgage, remember that slight variations in interest rates, loan amounts, and terms can significantly affect your monthly payment. To determine how much your monthly payment will be with various terms and loan amounts, try REALTOR.com's online mortgage calculators.

More from HouseLogic

Evaluate Your Adjustable Rate Mortgage

Show Your Support for FHA

Other web resources

How much home can you afford?

Why ask for an FHA loan?

G.M. Filisko is an attorney and award-winning writer who's opted for both fixed and adjustable-rate mortgages. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Reprinted from HouseLogic (houselogic.com) with permission of the NATIONAL ASSOCIATION OF REALTORS (R).Copyright 2010. All rights reserved.

VA Loan Entitlement & Eligibility

by seacoast_ashley 22. June 2010 14:32

Written by guest blogger H.C. "Hutch" Hutchison, Ed.D.

The VA Loan Entitlement is the basic amount for which the Veteran’s Administration will insure or guarantee a loan. The loan entitlement is based on an applicant’s income.

The VA Guaranty Amount varies with the size of the loan and the property location with the VA guaranteeing 25 percent of the principal amount, up to the maximum guaranty. For the United States (excluding Alaska, Hawaii, Guam and the U.S. Virgin Islands) the guaranty amount is the greater of 25% of $417,000 or 125% of the area median price of a single family residence. It's a good idea to check with a lender for current figures. However, the guaranty amount cannot exceed 175% of the Freddie Mac limit for a loan on a single-family residence in the county where the property is located. In 2009 the maximum loan amount was $1,094,625.

The initial step in purchasing a home using a VA loan entitlement is to obtain a Certificate of Eligibility (COE), a VA-provided document that certifies your eligibility for a VA home loan guaranty. There are two ways to obtain a Certificate of Eligibility: online or by mail.

You can obtain a COE online by first registering at the Veterans Information Portal. There are instructions for applying for your COE online, but the process can be daunting if you aren’t familiar with all the jargon. However, try WebLGY first because approximately 56% of attempts result in an immediate COE. If you find the Internet a little overwhelming, then I recommend working with a lender that has access to the VA’s WebLGY system. A lender can help walk you through the process and may be able to issue your COE in minutes. A quick call to a lender can tell you if that lender has access to “WebLGY.”

As you shop for a loan, don’t limit yourself to just one lender. Visit three or more and let each lender know you are “shopping,” because competition can result in offers of more competitive loan packages.

By Mail:
Sometimes the VA does not have sufficient data in its online records. In that case, you must apply for the COE by mail. A veteran can obtain a COE by completing VA Form 26-1880, Request for a Certificate of Eligibility, and mailing the form to: VA Eligibility Center, P.O. Box 20729, Winston-Salem, NC 27120. Just remember, you are dealing with the VA. It may take time for the VA representative to receive, process and then approve (or reject) your request and then return the COE to you.

Once you receive your COE, you have completed Step 1 of the 7-step process to purchasing a home. Step 2 is finding a home you wish to purchase. We will look at that step in the next blog entry.

H.C. “Hutch” Hutchison, Ed.D., retired from the U.S. Army in 1991, after more than twenty-two years of active duty. Since then, the former helicopter test pilot and aviation maintenance officer has earned his third post-graduate degree and taught under-graduate and graduate courses. In addition to practicing real estate with Coldwell Banker Sea Coast Realty, Hutchison is active in national, state, and local leadership organizations and local chapters of the Vietnam Veterans of America, Veterans of Modern Warfare, Disabled American Veterans, Veterans of Foreign Wars, and United States Army Warrant Officer Association.

What is a VA Loan?

by seacoast_ashley 4. June 2010 13:18

By H.C. “Hutch” Hutchison, Ed.D.

The men and women of the United State military devote themselves to ensuring that freedoms are protected, maintaining peace, and providing relief to those that are enduring hardship. Benefits of military service can include training in many diverse fields, pride of serving, civilian education, travel and the opportunity to grow as an individual. One significant benefit that can be derived from military service is the opportunity to obtain an home loan guaranteed by the Veterans Administration (VA).

What is a VA loan?

Banks and other private mortgage companies make a special type of home loan to veterans of the U.S. armed forces. The Department of Veterans Affairs guarantees a portion of each VA loan and protects the lender’s investment if the borrower defaults.

Who is eligible for a VA loan?

World War II: Sept. 15, 1940 – July 25, 1947

Post World War II: July 26, 1947 – June 26, 1950

Korean War: June 27, 1950 – Mar. 31, 1955

Vietnam Era: Aug. 5, 1964 – May 7, 1975

Post Vietnam: May 8, 1975 – Aug. 1, 1990

Persian Gulf: Check with VA regional office for specific eligibility.

Afghanistan & Iraq: Check with VA regional office for specific eligibility.

Peacetime Service: At least 181 days of continuous active duty with no dishonorable discharge (in part)
* May 8, 1975 – Sep. 7, 1980 (enlisted)
* May 8, 1975 – Oct. 16, 1981 (officer)
* Enlisted veterans whose service began after Sep. 7, 1980, or officers whose service began after Oct. 16, 1981 must normally have served at lease two years.

Reserve and National Guard: Members who have competed six years of service and honorably discharged (or still serving) may be eligible. Contact a VA regional office for more details.

*To determine individual eligibility visit http://www.va.gov or contact a VA representative.

H.C. “Hutch” Hutchison, Ed.D., retired from the U.S. Army in 1991, after more than twenty-two years of active duty. Since then, the former helicopter test pilot and aviation maintenance officer has earned his third post-graduate degree and taught under-graduate and graduate courses. In addition to practicing real estate with Coldwell Banker Sea Coast Realty, Hutchison is active in national, state, and local leadership organizations and local chapters of the Vietnam Veterans of America, Veterans of Modern Warfare, Disabled American Veterans, Veterans of Foreign Wars, and United States Army Warrant Officer Association.


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