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What are Closing Costs

What are Closing Costs

CLOSING COSTS are fees that are earned before closing but are payable at or before closing and fees that are required to be paid at closing to complete the loan transaction. These fees are itemized and estimated for you on the “Good-Faith-Estimate” now known as the “Loan Estimate” which is provided within three business days of the filing of your application.

Closing costs are typically divided into two broad categories. First, there are the fees required by your lender and mortgage broker as a condition of closing your loan. These Fees may include an application fee, appraisal fee, credit reporting fee, interim interest until the end of the month, mortgage broker points and lender points (a point is one percent of the principal loan amount). Tax and insurance escrows would be discussed later. Second, there are Fees payable to third parties whose services are required by the lender as a condition of closing your loan. The most prominent of these Fees are related to the delivery of a title report and a policy of title insurance to the lender, to ensure its interest in the property securing the loan. In addition to collecting fees for title insurance premiums, necessary searches, and policy endorsements, the title company will collect from the borrower at closing, an amount sufficient to pay the mortgage recording tax (0.80% in New York State, 1.80% in the five boroughs of New York City, but isn’t applicable on co-ops), the fee to record the deed (in purchase transactions) the mortgage and any satisfaction, and an amount sufficient to pay any open taxes or assessments or any such charges that will become due within sixty days of closing.

Further third party fees include charges for hazard and flood insurance (if applicable), flood certification, private mortgage insurance (if applicable), termite inspection, well water and cesspool inspections (if applicable), legal fees payable to the lender’s settlement agent, and survey charges (if applicable).

If your loan provides for the lender to escrow funds for the payment of taxes and/or insurance, an amount necessary to fund the escrow account will be collected at closing, so that there will be sufficient funds available, when combined with the amounts collected as part of your monthly payments, to pay these charges as they become due.

Closing costs may be paid out of the loan proceeds or they may be paid separately by the borrower, usually by certified check. Certain loan programs allow the borrower to finance the closing costs by increasing the loan amount in an amount sufficient to pay these charges or by adjusting the interest rate.

The Loan estimate (Good-Faith-Estimate) will estimate each of the above-described charges that are applicable to your loan transaction, for you.

Contact us today at 800-535-0270 for more information or email us here.

LPMI -Lender Paid Mortgage Insurance

LPMI -Lender Paid Mortgage Insurance

Mortgage insurance, or PMI, is typically required on residential mortgage loans with greater than 80 percent loan-to-value on the first lien. The purpose of PMI is essential to protect the lender in the event you default on the mortgage, and it is required for higher LTV loans because there is a greater risk of default on these mortgages. Mortgage insurance can be expensive, and in some cases, it can add hundreds of dollars onto your expenses each month. There are essentially two ways to obtain a higher loan-to-value mortgage without having to pay mortgage insurance. The first is to structure a combination loan with a first and a second lien. The second is to apply for a mortgage with Lender Paid Mortgage Insurance or LPMI.

What to Expect With LPMI

With an LPMI program, you generally will have a slightly higher interest rate than with a standard PMI program. You should keep in mind that the PMI is not tax deductible, but your mortgage interest charges are. Therefore, you can analyze both options to determine if the extra tax deduction from the LPMI option is a better solution for you from a financial standpoint. You can apply for a loan-to-value for up to 97 percent, which makes the program ideal for those who have minimal funds available for a down payment.

The Alternative of a First and Second Lien

Some may think that they can save money by avoiding PMI and the higher interest rate with the LPMI program altogether by setting up a first and second lien. For example, you may apply for an 80 percent LTV first lien and a 17 percent LTV second lien. This structure will eliminate the PMI payment and the higher rate associated with LPMI. However, the second lien interest rate is often several percentage points higher or more than a first lien. Therefore, there is a cost associated with this option as well.

If you are looking for the most affordable loans for your upcoming real estate purchase, it is wise to reach out to MortgageDepot. Each borrower and each loan scenario is unique, so there is not a single solution that is most affordable for everyone. When you work with our mortgage representatives, we will help you to explore all of the options so that you make the best decision about your mortgage. Contact MortgageDepot for mortgage information about our loan programs.

To contact us by phone call 800-535-0270 or email us by clicking here.

New construction extended rate locks

New construction extended rate locks

Build with confidence

You as a customer benefit from locked in rates

We help our customers gain peace of mind in a changing market with the Extended Rate Lock program. You can lock down a range of interest rates with a required, non-refundable extended rate lock fee.

How it works

If interest rates go up, our customers are protected from 5 to 24 months, depending on their loan type

If interest rates go down, our customers may qualify for a one-time float down option to a lower rate or different loan program. Talk to us about this possibility.

If our customers feel confident knowing that their interest rate range won’t change, and they can feel confident building a home for their future.

Protect your interest rate on spec projects

As you market and sell your spec properties, consider a short-term interest rate lock-in through our Lock-in program. You can lock-in for up to 120 days, giving you more time to market and sell your property.

Supporting you

Let’s connect about working together to help you.

Contact us today at 800-535-0270 for more information or email us here.

Self Employed – ONE YEAR TAX RETURNS – Jumbo Loans to $3.5mm

Self Employed – ONE YEAR TAX RETURNS – Jumbo Loans to $3.5mm

Self Employed – ONE YEAR TAX RETURNS – Jumbo Loans to $3.5 million.

A common request as of late has been Self Employed Borrowers only wishing to provide their most recent tax returns covering a one year period, so yes, WE CAN OFFER THIS AMAZING NICHE to our clientele.

The Self-employed Program which goes as high as $3.5 million in guideline, allows for a Self Employed Borrower to partake of this aspect with the following needs 

  1. The borrower has been Self Employed for at least 2 years;
  2. The borrower provides their most recent tax filings for their Personal & Business Tax Returns with all schedules;
  3. An unaudited Profit & Loss is provided from the tax year end to current date.
  4. An unaudited Balance Sheet is provided from the tax year end to current date.

Once it’s determined by comparison review that the income is stable, positive and trending; borrower can proceed as a Full Doc loan under the Self-Employed Program

  • 85% to $1.5mm loan amounts.
  • 80% to $3.0mm loan amounts.
  • 65% to $3.5mm loan amounts.
  • Unlimited Cashout.
  • Gifts allowed.
  • Can close in the name of an LLC.
  • Interest Only.
  • Can be an ARM or Fixed rate mortgage.
  • Cashout Proceeds can be used to satisfy the Reserve Requirement

Should you have any questions or comments, please feel free to reach out to us.

Contact us today at 800-535-0270 for more information or email us here.

Home Equity Lines Of Credit

Home Equity Lines Of Credit

Heloc also knows as Home Equity Lines Of Credit are a perfect 2nd mortgage for a perfect situation.

Home Equities are primary know as second mortgages but can also be used as first mortgages for those that don’t have a first mortgage in place. There are many reasons why a home equity line of credit is beneficial.

When is the best time to provide our clients with a HELOC? When they don’t need it!! Its a great source of money when need it, like a rainy day fund. Heloc’s is perfect to have access to funds during a difficult time. Even if things are good, clients can use it to pay off bills, pay for college educations, weddings, vacations and more!

Get started now! It’s easy to Get you set up with a HELOC:

Contact us for more information about Home Equity Lines of Credit.

Call us today at 800-535-0270 for more information or email us here.

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