There are two categories of closing costs:

Non-recurring and recurring (aka pre-paids) costs.

 

Non-recurring closing costs happen one time as part of the transaction.  These costs can vary depending on the area of the country but here are some examples of the typical costs you might see.

  • Appraisal
  • Credit report
  • Underwriting fee
  • Termite Report (Refinances)
  • Notary fee
  • Title Insurance
  • Flood determination
  • HOA processing fees
  • County Recording Fees

Recurring Closing Costs, or prepaids, refers to costs incurred as part of homeownership. Some examples would include

 

•Homeowner’s insurance premium

•Prepaid interest on the loan

•Property taxes due at closing

Property tax and insurance impounds

 

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Laura Borja- Home Loan expert- NMLS 199107

Only assets derived from acceptable sources are allowed for down payment and closing costs.

Down Payment

No down payment is required if:

  • Purchase price is at or below the county loan limit AND
  • The appraisal supports the sales price

Closing costs

Real estate and mortgage transactions have fees associated with them, regardless of the type of financing involved.

 

The amounts charged will vary depending on the location of the property, the time of the year the loan closes and the fees charged by 3rd party providers.

Allowed Sources of Funds

Source Down
Payment
Closing
Costs
Buyer's own funds: checking, savings, retirement,investments and cash on hand.
Loans against financial assets such as other real estate, retirement and investment accounts and other depository accounts.
Proceeds from the sale of real estate and other personal property.
Gift funds: must be from a family member, employer, government agency or charitable organization. A gift letter must be signed by the donor and the transfer of the funds must be documented.
Seller Credit**
Lender Credit

**Interested party contriubutions include credits from the Seller, real estate agents, builders and developers that are applied to closing costs and other transactions fees are limited to 6% of the sales price.

Non-Allowable Sources of Funds

  • Unsecured signature loans
  • Cash advances on credit cards
  • Borrowing against any non-real estate property such as vehicles, furniture, jewelry and household goods
  • Any and ALL funds derived from illegal sources

This overview is not all inclusive and does not include all guidelines or potential qualifying situations. Contact us or your lender for additional information that applies to your situation.

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Laura Borja- Home Loan expert- NMLS 199107
Laura Borja- Home Loan expert- NMLS 199107
Laura Borja- Home Loan expert- NMLS 199107