Closing costs for a loan differ a little depending upon whether the transaction is a purchase or a refinance. Generally, the costs are a little higher for a refinance because the "owner" pays for title insurance as opposed to a purchase, whereby the seller usually pays for the title. Closing costs vary from lender to lender, but generally are as follows:
1 - Loan Origination Fee: 1% of the loan amount, but can be negotiated.
2 - Lender Fees: About $ 400 to $ 500 which covers Underwriting, Document Preparation, Tax Service and Flood Certificate.
3 - Title Insurance: About $ 75 on a purchase. On a refinance, it depends on whether you get the "reissue rate" or not. The reissue rate is basically a discount given on policies that are 5 years old or newer. Otherwise, the borrower is stuck with the "full" basic rate. It’s based on the loan amount but generally averages about $ 300 to $700.
4 - Title Closing: $ 150 covers the title company closing the loan for the lender
5 - Endorsements: About $150 to $200. These are "riders" to the basic title policy which protect the lender for the following situations: 1) HOA dues, in case you don’t pay the HOA., 2) Lot lines and boundaries, protects the lender in case there are encroachments, 3) Oil & Minerals, in case the owner of the mineral rights decides to dig for gold underneath your property, and 4) EPA, in case you do toxic things in your backyard, i.e. bury toxic waste drums.
6 - Appraisal/Credit Report: $ 336. This is the only cost "out of pocket" that you have to pay up front. The other fees can be rolled into the loan.
7 - County Recording Fee: about $40 to $50 depending on number of pages in the Deed of Trust.
8 - FedEx/Courier Fee: about $20 to $40 to overnight the payoff to the old lender and to get documents to closing.
The other charges related to a loan would be the "escrows" or impounds for hazard insurance, property taxes, and, possibly mortgage insurance, if required. These charges depend upon the time of year that the new loan is taking place and are set up so that the new lender can pay your taxes and insurance on time. Sometimes, an "escrow waiver" is granted (less than 80% loan to value), in which case the lender will allow you to pay your own taxes and insurance. However, they generally charge a "one-time" fee of .25% of the loan amount for this privilege.
“Do-It-Yourself”
Construction Loan:
Loan Features:
| · | Unlimited
construction draws with no draw fees |
|
| · | Draws
are ordered by phone and mailed back to you the next business day. |
|
| · | A
current statement of account is provided with every draw, to help you
monitor the balances left in the building budget. |
|
| · | Financing
from any stage of construction. |
|
| · | No
requirement that you be a licensed builder or that you work with a
licensed builder. |
|
| · | Freedom
to hire your favorite tradespeople and purchase materials from your own
suppliers. |
|
| · | A nine month loan and extensions are available. |
Qualification Requirements:
| · | Your
income and credit rating must be adequate to qualify you for a permanent
mortgage that will pay back the construction loan when your house is
complete. |
|
| · | The
construction costs on your Building Budget must be realistic and
sufficient to complete all construction. |
|
| · | Your
down payment into the project must be at least 20% of the total project
cost. The total project cost
is determined by adding the value of the land to the amount needed to
build the house. |
|
| · | Your currently “listed” house for sale will not be counted in your ratio’s. In other words, your qualification will be based solely on the new property. |
How to Apply:
Call Rick Reblin and have him fax or mail you a “Building Budget” as
well as a loan application. Rick
can also assist in finding your lot or land, if you don’t already have a
realtor.
If you need help finding land, a builder, or a loan in Douglas County, call Parker Mortgage, licensed Real Estate and Mortgage Broker.
Closing Costs
"Do it Yourself"
Construction Loan
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