Closing is a long, complex process that all homebuyers must go through to get their dream homes. This extensive process can take over a month to complete as buyers complete every stage until closing day.
Fortunately, there are several preparatory steps that you can take to prevent things from falling through.
Here’s what to expect at closing and the benefit of having your mortgage lender present throughout the process.
What To Expect At Closing
So just what do you need to prepare for when closing on a house?
One of the most important things to take into account is the costs. Getting ownership of a home doesn’t just involve mortgage payments. Closing costs can range from 1% to a hefty 6% of a house’s total price, typically falling somewhere in between.
Some of the expenses that are involved in the closing process include a home inspection, lender fees, property appraisal, property taxes, a survey fee, and title insurance. While some stages of the closing process are optional or depend on what type of loan you choose, even the simplest mortgage closing isn’t cheap. While sellers do pay a portion of the costs, most expenses rest on the shoulders of the home buyer since most of these fees tie in with the mortgage.
Having a mortgage lender with your best interests in mind will help things flow easily.
Here are the benefits of working closely with a reputable mortgage lender throughout the process.
Benefits Of Low Closing Cost Mortgage Lenders
Homebuying is a tricky procedure for both new and repeat buyers alike.
One of many homebuyers’ main concerns is how to find low closing cost mortgage lenders. While closing costs rise or fall along with a high or low home price, there are ways for buyers to avoid unnecessary closing fees.
A lender that knows how to navigate closing while minimizing your fees is helpful in today’s skyrocketing housing market.
1. Pre-Approved Loans
There is nothing worse than having your home purchase deal fall through on the closing day.
After your home appraisal is complete, it’s time to be proactive about getting a mortgage.
One of the best ways to prevent this is to get a pre-approved loan before you even begin with closing.
When your lender has confirmed your income and credit score, your chances of going through a smooth closing period are much greater. Proving that you can afford your home will make it far more likely that the seller won’t back out in favor of a more reliable buyer.
2. No To Low Closing Costs
Many lenders are willing to work with home buyers to reduce closing costs or make them easier to pay.
The origination fee, which is involved in the closing stage when your lender processes your loan, can be tough on your wallet. Some lenders will forgo this fee entirely to relieve their customers of extra closing costs.
Even if you do not qualify for a loan with a lender that doesn’t involve an origination fee, there are still other ways you can get an affordable rate. Some mortgage lenders include the origination fee in your loan payments. Although this could mean higher interest rates, this option is still a good choice for low-income buyers. It is not always practical or financially wise to opt for paying the origination fee upfront. This way, you can pay the fee down slowly over a long period along with the rest of your mortgage.
3. Fixed-Rate Mortgages
If you are a new buyer or on a strict budget, a fixed-rate mortgage may save you money in the long run. FHA loans, which are easier for new or low-income buyers to qualify for, are typically fixed-rate loans.
While adjustable-rate mortgages can be beneficial when interest rates fall, this option may hurt low-income buyers, as rising interest rates will add considerable expenses to monthly mortgage payments.
If you find that an adjustable-rate mortgage may fit you better in the future, the good news is that refinancing is a viable option. In the meantime, making sure that you get an affordable, pre-approved loan is an essential step to the closing process.
Affordability is the biggest obstacle that new buyers face today. Working with a low closing cost mortgage lender will help you save more money when closing on your dream home.
At Supreme Lending, we can help you find the right lender for your home purchase goals. Get started with us today to explore the best mortgage loan options that are in your area.