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Have you saved enough for your closing costs?
By Chris
January 23, 2017

There are many potential homebuyers, and even sellers, who believe that they need at least a 20% down payment in order to buy a home or move on to their next home. Time after time, we have dispelled this myth by showing that many loan programs allow you to put down as little as 3% (or 0% with a VA loan).

If you have saved up your down payment and are ready to start your home search, one other piece of the puzzle is to make sure that you have saved enough for your closing costs.

Freddie Mac defines closing costs as:

“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage. These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

We’ve recently heard from many first-time homebuyers that they wished that someone had let them know that closing costs could be so high. If you think about it, with a low down payment program, your closing costs could equal the amount that you saved for your down payment.

Here is a list of just some of the fees/costs that may be included in your closing costs, depending on where the home you wish to purchase is located:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services (insurance, search fees)
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting fees

Is there any way to avoid paying closing costs?

Work with your lender and real estate agent to see if there are any ways to decrease or defer your closing costs. There are no-closing mortgages available, but they end up costing you more in the end with a higher interest rate, or by wrapping the closing costs into the total cost of the mortgage (meaning you’ll end up paying interest on your closing costs).

Home buyers can also negotiate with the seller over who pays these fees. Sometimes the seller will agree to assume the buyer’s closing fees to get the deal finalized, which is known in the industry as ‘seller’s concession.’

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

Housekeeping Tips

Hate cleaning your house? No one could blame you!  Before hiring a housekeeper or cleaning service, do yourself a favor and start with these items to save you money and keep your maid happy!

1. Clear the clutter first. 

Maria Stickney, the Housekeeping Manager at the Radisson Blu Mall of America in Bloomington, Minnesota, likes to clear the clutter out of a room, so she can start with a blank slate. She empties the trash, removes the linens, towels, and anything else left behind. In the bathroom, she clears the towels, bathmats, bottles, and everything on the counters or toilet tank. "This removes the temptation of just wiping around these items or picking them up and immediately placing them back down on a wet surface, which can leave ring marks," she says.  (From Good Housekeeping)

2. If you wouldn't touch it, they won't either.

Yes, housecleaners will scrub away that nasty buildup around the bottom of your toilet seat. But they also have a limit: They won’t pick up your dog’s poop.

Or—and yes, Megan Sentner, manager at Greenapple Cleaning in Ottawa, Ontario, says it’s happened—yours.

“Sometimes there are expectations that we can clean it, but we don’t,” she says. “We don’t expect our team to handle any waste above the usual cleaning of the bathroom or the toilet.” (From Realtor.com)

3. Be Specific.

Unless you’re ordering a top-to-bottom scrubbing every week, your cleaners need direction. Is the bathroom looking a little grungy? Ask them to spend extra time on the shower. Request extra attention to your baseboards. Sic them on your son’s room, now that he’s finally off to college.

“If they don’t leave full instructions, there’s a chance they’ll be disappointed,” Sentner says.

If you’re new to the world of professional housecleaning, you might not know exactly what your home needs most. Most maid services will happily stop by for a consultation so you can learn exactly how dirty you are. (From Realtor.com)

4. Check Insurance.

There are two basic type of housekeepers: independents who work on their own, and those who work for companies. With independent contractors, you might be responsible for issues of work eligibility and withholding taxes, which you won’t be if you hire through a company.

Either way, make sure the cleaner is bonded and insured, for their protection as well as yours. (Bonding will help if the housekeeper damages something in your home; an insured worker can keep you off the hook for liability in on-the-job accidents.).  You can also get added insurance through your local insurance provider. (From Denver Post)

5. Don't ask them to lift heavy objects.

Moving boxes and heavy furniture is definitely in the no category. You don’t want a housekeeper getting hurt. Different housekeepers and cleaning companies have different policies on what they will and won't do. “Moving things over 35 pounds is off-limits to cleaners,” says former housekeeper Karine Nelsen, who now runs Zephyr Clean in Idaho. "There's just too much of a risk for injury."  (From Care.com)

Kidde Recalls more than 5 million combo smoke alarms!

Kidde recall: What you need to know

When's the last time you checked the smoke detector in your home?

This recall involves smoke/CO alarms with model number KN-COSM-IB and manufacture dates between June 1, 2004 and Dec. 31, 2010.

"When the alarm reaches the end of its useful life, it issues an end of life chirp every thirty seconds," Kidde says in an online post. "If the battery is replaced when the unit is at its end of life, and the test button is pressed within 10 seconds thereafter, the unit will no longer issue an end of life chirp."

So you may think your detector is properly working, only to discover in an emergency that it's not!

An estimated 3.6 million of these alarms were sold nationwide in the United States via the big-box home stores, electrical distributors and on Amazon. Price points were reportedly between $40 and $65. An additional 1.5 million units were also sold in Canada.

Kidde says it has received word of eight incidents with the recalled alarms failing to work. But thankfully there have been no injuries.

If you have one of these detectors in your home, contact Kidde immediately for a free replacement alarm (based on date of manufacture) or a discount on a new alarm.

You can reach the company toll-free at 855-239-0490 from 8 a.m. to 5 p.m. ET Monday through Friday or online at Kidde.com.

Having working smoke alarms and integrated smoke and fire detection in your home alarm system are two simple ways you can protect yourself and your family from the threat of fire.

Think you can't afford a smoke detector? Call a fire station and ask for a referral to an organization that's giving away smoke detectors. Don't let money force you to put your family into an unsafe situation.

 

Renters Insurance

About a week ago, a young couple that I know had lost everything in a home fire.  They lived in a duplex and both units were total losses.  The young couple on one side, a family of 5 on the other, all had nothing except what they wore out of the home.

Most people do not have unlimited funds to purchase everything.  Imagine having to purchase all new clothes, a new cell phone, all new furniture, a new vehicle, new toiletries, new food, the list seems to go on and on.  One unit had renters insurance and one did not.  Many landlords recommend and some even require renter insurance.  All insurance companies can work with you to list items to determine coverage amounts.  Most policies are less than $30 per month.  So for a dollar a day, you have the protection for the worst case scenarios.  I highly recommend rental coverage.

Be careful out there and be prepared.

 

First Time Home Buyer

Yesterday I was talking to a young couple about purchasing a home in the next couple years.  We discussed a few things like if they knew what their credit ways like.  He said that he thinks it is 580 or so.  I told them that as a first time home buyer, there are many tools to get you into a new home.  However; they need to bring that credit score up.  First, you need to get your credit report so you know the good, the bad, and the ugly.  From there you will be able to evaluate and bring that score to the required minimum of 640.  

The Federal Housing Administration offers first time home buyers loans with very little down payment.  Your down payment can be as low as 3.5% down.  There are even home loans from the USDA in the outlying areas.  USDA loans have to meet income restrictions and also property location restrictions.  USDA loans offer no payment to help get the new buyer into the home, just a service fee which is currently about 1%.  

Be sure to ask me for recommendations on lenders.  Not all lenders are the same.  I can recommend ones that I have worked with in the past that are honest, professional and in compliance with required laws.  Unfortunately there are lenders out there that prey on unexerienced buyers.  We don't want you to encounter those.

Please call me if you have any questions, even if you have already purchased.  I am here to help!