How much money is needed at time of closing?
PURCHASE:
As you consider financing for a new home purchase, the following is an overview of funds needed where such purchase financing is concerned (NOTE: The following is specific to the mortgage financing, as additional real estate fees, ie inspection fees, may be applicable) -
- Assumed purchase price of $300,000..
- Assumed loan amount of $285,000 (Down payment = 5% = $15,000).
- Assumed property taxes ESTIMATED at $300/month.
- Assumed homeowner's insurance ESTIMATED at $75/month (you will establish insurance premium direct with your preferred insurance provider).
At closing, funds will be needed in address of the following three (3) categories -
1) Down Payment – At purchase price of $300,000, 5% down payment is equal to $15,000..
2) Closing Costs – The selection of a rate/cost combination would represent final closing costs. While many lenders only offer financing with a full set of closing costs ($2,700+), pleased to be able to offer reduced closing cost/NO cost finance options. I will provide additional detail regarding this rate/cost relationship at the appropriate time.
3) Prepaid Expense – I have assumed a month end closing date. IF you are escrowing for property taxes/insurance, funds are needed at time of closing to account for your tax/insurance escrow requirement. Additionally, first year's homeowner insurance will also be due at closing (est. $900). Prepaid funds of approximately $1,800 could be expected at time of closing.
Should you consider the above 5% down payment option with a more traditional set of closing costs, funds needed at time of closing of approximately $19,500.. This is represented by the down payment ($15,000) PLUS closing costs ($2,700) PLUS prepaid/escrow account ($1,800).
The above is presented for illustrative purposes only, as we can adjust the figures (ie down payment, costs, escrows) to best align with your budget.
REFINANCE:
Under refinance transactions, I have the same ability to put forth a rate offering WITH closing costs OR with limited/NO closing costs. The lower the rate, the greater the closing costs. Together, we will arrive at the rate/cost option which will best meet your needs.
Should you select a rate with closing costs, those costs can be paid in full at time of closing OR included in the new loan amount (appraised value dependent). Additionally, funds needed to establish your new escrow account (prepaid expenses) can be paid at time of closing OR also included in the loan amount.
With the ability to consider a cash out refinance to include access to additional funds OR an increase in loan amount to account for costs AND prepaids - we will arrive at your most efficient finance plan in the marketplace.