We're going to cover home buying closing costs in-depth in this video!
Closing costs on a home are often too mysterious and honestly a lot of people try to hide the cost and fees that go into purchasing a home. So, what ends up happening, is that the information isn't presented clearly up-front, and then buyers feel tricked into payments, costs, and fees.
If you want to take ownership of the home you're buying for you and your family, you need a very clear idea of how your loan is being set up and what is going into it.
So, first of all, let's talk about the Loan Estimate. The Loan Estimate is the Federally required document that every lender in America is required to send out within 3 days of a loan application. Usually, this is when you get an accepted offer on the home you're looking to buy.
In essence, as soon as you get an offer accepted, your lender is required to send you a Loan Estimate in 3 days. Often, the Loan Estimate is included in a mix of other disclosures and can get lost in the shuffle.
Sidenote: to prevent any confusion and make sure my buyers have 100% clarity and control of their loan, I send them a personalized video walkthrough of their Loan Estimate, what costs are being charged, and who they're being charged by.
Now, when purchasing a home, you're going to run into closing costs no matter the type of loan or "special deals". There's no such thing as a free lunch! If it's discounted or cheap up front, it's going to be more expensive on the back end.
The confusing thing about Loan Estimates is that your lender is required to send it to you, so logically, it seems like it's the lender who is charging the costs and fees. However, that's not true at all.
The Loan Estimate details all of the required closing costs from multiple third parties in a deal. So, when you see the fees and costs to buy a home on your Loan Estimate, most of those fees are not charged by your lender.
So who chargers the closing costs when you're buying a home? Here's a couple companies/people that might charge fees:
- appraiser
- attorney
- title company
- home owner's insurance company
- the county
- the state
- the lender
- the realtor
- a home owner's association
- an inspector
- surveyor
Your Loan Estimate is like a map that gives you a guide on who is charging what, for what service, and for how much.
So the better you understand your Loan Estimate, the better you understand all of your closing costs!
In the video, I'll walk through 2 different Loan Estimate examples from my own clients (obviously, personal info is hidden).
I'll give you a walkthrough similar to what I do for my clients. We'll go line-by-line through an FHA loan in Ohio and a Conventional loan in Tennessee.
Hey, my name is Kyle and I'm a Mortgage Advisor serving Tennessee, Florida, and Ohio. My goal is to help you get a crystal-clear home loan that helps you win the house you love. If you're ready to create your home-buying plan, you can reach through any of the ways below:
(0:00) - Introduction
(3:23) - Loan Estimate Walkthrough - FHA Loan - Intro
(6:24) - Loan Estimate Walkthrough - FHA Loan - Terms
(7:37) - Loan Estimate Walkthrough - FHA Loan - Projected Payments
(8:13) - Loan Estimate Walkthrough - FHA Loan - Closing Cost Details
(16:36) - Loan Estimate Walkthrough - FHA Loan - Comparisons & Other Considerations
(17:55) - Loan Estimate Walkthrough - Conventional Loan - Intro
(18:49) - Loan Estimate Walkthrough - Conventional Loan - Terms
(19:05) - Loan Estimate Walkthrough - Conventional Loan - Projected Payments
(19:52) - Loan Estimate Walkthrough - Conventional Loan - Closing Cost Details
(22:37) - Loan Estimate Walkthrough - Conventional Loan - Comparisons & Other Considerations
(22:52) - Conclusion & Summary
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