Some Advice, please?

What is the name of your state? CT

Hi,

I'm house hunting and a little confused. I have a mortgage pre-approval for 175,000.00. I'm only 20 years old and I'm nervous because I've seen a house I like, and made an offer, but what next? What are closing costs, and do I need a lawyer to represent me? What is escrow? My loan is a first time buyer, no money down loan. What fees do I pay, cause I know there are some. I'm waiting on my loan officer to call me back and I just want some answers from someone out of the picture that's not making money off me.

Any additional advice or tips would be great.

Thank you very much,

Jessa

[nextwife]

You're a first time buyer, and you have just proceeded through both the prequalification process AND an offer to purchase, and NEITHER your loan officer nor your Realtor reviewed closing costs with you?

Did you make certain your offer had a proper inspection and financing contingency? Attorney review clause? Have you checked with the municipality to make certain no major changes or projects are planned in the area that would adversely impact your value or use?

Maybe I'm not being clear enough. I got my pre-approval through a mortgage company that has nothing to do with the realtor. The offer I made is just an offer - not a binding document. It states I'm offering X amount. If the seller accepts the amount, I then have 5 days to gwt an inspection done, structural inspection done, etc, as well as decide if I actually want the house or not. If the seller does not accept X amount, she then returns the offer paper with an amount she does find acceptable. I guess there is no way to review what the amount of closing costs will be, because it hasn't even been touched upon. My question meant, what are they, what is a closing cost? Is it a percentage of the house payment, is it attorney fees, or what? I heard 2 terms, escrow & closing cost, and I don't know what that means, and if I need an attorney.

The last question you asked me is EXCELLENT. I can't thank you enough for that. I didn't even take that into consideration.

I'm just really young and don't know what I'm doing or what all these terms mean. This isn't something I can make a mistake on - it's a mistake I'll have to live with for 10 years. My loan officer & the realtor didn't really answer my questions, you can see on their faces that I'm annoying and young.

I just don't want to screw this up.

[HomeGuru]

Originally Posted by jessa4

Maybe I'm not being clear enough. I got my pre-approval through a mortgage company that has nothing to do with the realtor. The offer I made is just an offer - not a binding document. It states I'm offering X amount. If the seller accepts the amount, I then have 5 days to gwt an inspection done, structural inspection done, etc, as well as decide if I actually want the house or not. If the seller does not accept X amount, she then returns the offer paper with an amount she does find acceptable. I guess there is no way to review what the amount of closing costs will be, because it hasn't even been touched upon. My question meant, what are they, what is a closing cost? Is it a percentage of the house payment, is it attorney fees, or what? I heard 2 terms, escrow & closing cost, and I don't know what that means, and if I need an attorney.

The last question you asked me is EXCELLENT. I can't thank you enough for that. I didn't even take that into consideration.

I'm just really young and don't know what I'm doing or what all these terms mean. This isn't something I can make a mistake on - it's a mistake I'll have to live with for 10 years. My loan officer & the realtor didn't really answer my questions, you can see on their faces that I'm annoying and young.

I just don't want to screw this up.

**A: in addtion there are pest inspection, environmental hazard inspection, survey, building permit check, title report review, CC&R review (if any) etc. Your Realtor should be able to do a rough ballpark closing costs estimate for you as well as educate you on the contingency items discussed in this thread. If not, talk to his/her principal broker. Your mortgage broker should be able to give you a rough HUD-1 that details the loan closing costs such as credit report, appraisal, points, loan processing and underwriting fees etc.
Keep asking the questions of them and make sure that these profesionals (and I use that term lightly) give you ALL the answers that you need.
Don't stop asking and learning.

[nextwife]

I understand the buying process, and trhe offer process. I NEVER wrote an offer with a buyer unless I knew that they had been advised about the costs they needed to cover and that whatever funds they would need, thjey actually had available to them. Even with no down payment, there are other costs, such as prepayables. I do not know what the program you are using allows to be wrapped into the mortgage.

I definately advise you to use an attorney.

There are closing costs associated with obtaining the mortgage. Examples would be:

appraisal, credit report, flood certificate, Lenders Title policy, interest from closing to first payment, mortgage recording fees, mortgage tax where applicable, closing prep fees, points. Some first time buyer programs also have buyer counseling sessions required, for example. TALK TO your LO.

There are other costs: one year of Homeowners Hazard Insurance, flood insurance, where applicable, HOA membership fees, Deed recording costs and any applicable taxes.

Escrow, title and closing fees vary from market to market as to Standard Practice of who pays what. That is why your Realtor should be reviewing what you should expect. I do NOT know Standard Practce in your particular market.

Here's who pays what in MY market, as an example:

Title Owners Policy (inclusive fee, Search and Exam): seller pays
Seller side closing prep costs: Either seller pays, or Realtor Office pays, depending upon listing agreement. This includes prep of W.D., Transfer Return, ordering payoffs and preparing closing statement, and attending closing to review. They usually have the title company do this, but some RE firms still have in-house closing departments.
State Transfer Tax: paid by seller
Special Assessment Letters: paid by seller
Code Compliance Inspection: paid by seller
Well and Safe Water Test: paid by seller
Surveys are almost never done here on existing construction, as the lender is protected by a comp endorsement from the title company.

AS there are differtences from market to market, TALK to your Realtor. It is part of their JOB to review these with you.
Recording fees for mortage/lien releases: paid by seller

[nextwife]

HG, thanks for adding. I'm used to those additional items being preprinted standard language in the State Bar Residential Offer to Purchase, so I hadn't thought in terms of, for example, title review and E&R doc review as needed to be added in! They would have to actually be deliberately EXCLUDED to NOT be in the offer.

I just want to say thank you to nextwife and homeguru. I could have gone to an attorney (I have to anyway) and paid an additional $250 for what I just got here.

Thanks. Now that I know what inspections need to be done, what I need to ask, and everything else you have provided me with, I have a steadier foot to stand on.

Again, thank you for your time. Do you have any idea how much more secure I feel now? Now I'm still just a kid, but a kid who knows what I'm looking for and how these things work.

[HomeGuru]

Hey nexie, I am a little concerned in that you do not, as a matter of practice, get surveys. As far as the Buyer is concerned, there could be all sorts of problems without a survey done. So what if the lender does not require it.
The Buyer may get a false sense of security and want to sue your brokerage firm if theu run into futire problems with boundary encroachments, land area smaller that the area listed on the purchase contract, building and zoning issues etc.

[nextwife]

When I said "we", I was referring to the entire market, not me personally (as I am not directly in brokerage). Yes, because the title company protects the lender, it is rarely done ON PURCHASES in this market. Even attorney's don't generally write in surveys as a requirement in a residential offer unless there is some particular survey concern.

A: The surveyors are backed up and will give a residential survey low priority, so getting one could take weeks and hold up the closing. Something neither the broker nor seller would be thrilled about.

In my part of the RE industry, I am very well aware of all the potential survey issues that exist. Nonetheless, I can't recall any straightforward transaction of an existing home where a survey was done as part of the offer process.

[HomeGuru]

Ok, thanks**************..