Mortgage Financing Made Easy

Here is a brief explanation of all the basics of a mortgage:

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When you find a property that you like and your agent writes up an offer, you will be required to write an earnest money check that you will send to the sellers agent with your offer; the check will be about 1% of the offer price. The earnest money shows the seller that you are a serious buyer. The earnest money will be added as a credit to your final closing costs and will lower the amount of cash you will have to bring into the closing. When you go to close on the home you will have to bring a cashier's check for any cash that is needed to close: total funds needed to close on the bottom of the estimates.

Buyers Inspection

As your realtor, I will talk to you about setting up a buyer's inspection. This is optional, but I highly recommend buyers opt for the buyer's inspection. This will cost you anywhere from $300-$500 at the time of inspection depending on the inspector you use, and you will pay for the inspection at the time of the inspection. The inspector will meet you at the house and do a thorough inspection (this will take a couple hours) pointing out any issues they notice with the house, they will then send you an inspection report for your records. This is separate from the appraisal.

Down Payment Info/Cash to Close

You will be bringing in the "cash to close" on the day of the closing for the down payment amount plus the closing costs. The earnest money you have already putdown and any seller paid closing costs will be subtracted from the cash to close total.

Monthly Payment Breakdown and Mortgage Insurance

Not all mortgages that a buyer does not put 20% down on require monthly mortgage insurance: if you have excellent credit and at least 3% down payment, you may be able to get a conforming loan with no personal mortgage insurance (PMI). You will shop for your own hazard insurance (AKA homeowners insurance) policy that is well priced with the right deductibles. For an FHA loan, the mortgage/mortgage insurance must remain in place for the life of the loan.