Im a little confused on all the extra's?

Question

My hubby and I applied for a home loan yesterday. The lady from the bank looked everything over and told us "go buy yourself a home",but as she was going over the paperwork everything seemed fine. Now I sit here and the more I think about it the more confued I get. Like the inspections and all the extra fees(bank fees and things) do we pay for those up front or are those included in the loan amount. The loan was for 250,000 at a fixed 6.7% intrest and our payments with insurance and taxes and the other thing that I cant think of right now were included are going to be around 1850.00. So I guess Im wondering if this "extras" are incuded or do they come out of our pocket like the closing cost? Sorry first time home buyer and a little scared and confused!!

Oh and when we get a realtor do we have to pay them to help us find a home?

Answer 1

please excuse how long this answer is, but it can be so confusing and scarry to buy a house the first time around, when it shouldn't be:

the loan payment she told you about is strictly for what we call 'the PITI of a mortgage:

Principal balance of the purchase price after your downpayment, e.g. the house costs $250,000, your down payment is $50,000 leaving a Principal balance of $200,000; and

Interest on the loan (always the highest portion of your monthly payment, so do the sensible thing: every time you have even a few extra dollars, send it in the form of a check into the bank, marked "principal only" in the memo section, which will then reduce the total cost in interest that you pay as well as cut down the length of time it takes you to pay off the Principal balance; and

Taxes: real estate taxes assessed on the house; and

Insurance: the homeowner's insurance policy, for a year of insurance, that you buy shortly before you close, bringing the paid receipt and policy to the closing (or else they won't let you close), and possibly the something else could be:

PMI: Private Mortgage Insurance, which you must pay if your down payment is less than 20% of the sale price. know that when your principal payments do add up to that 20%, you have the right to, and you should, get PMI removed from the amount you pay each month.

PITI + PMI will be the amount you pay out monthly. it is called your mortgage payment.

ask the lender for a Truth in Lending statement that will show you each and every other little thing that you must pay for at closing. there are Loan Origination Fees, Title fees, Endorsement fees, all sorts of other little fees that can add up to a lot of money.

you will also pay, at closing (if your state is not CA, where all closings are done in escrow):

real estate attorney fees (when closing in escrow, you do not need one at all)

title insurance fees

transfer stamps that per contract and/or per the laws of your municipallity must be paid by the purchaser

"points" on the principal balance of the mortgage in order to close at 6.7%. these days, though, most home buyers don't have to pay any points. a point equals one percent of the loan amount

no, you don't have to pay a Realtor anything to represent you, and you definitely SHOULD get a buyer agent! the Realtor, buyer agent will represent YOUR interests, not those of the seller. the seller will pay a commission out of the proceeds he gets at closing to his listing broker. if that amount happened to be, for example, $40,000, usually what happens is this:

1/4 goes to your buyer agent;
1/4 goes to your buyer agent's managing broker/the agency she works for;
1/4 goes to the listing agent;
1/4 goes to the listing agency/listing broker

don't do this: do not have your buyer broker work hard for you only to turn around and buy a house when you walk into an open house. show the buyer broker business card to the listing agent at the open house and have her write it down into the book. i'd never steal anyone's client, but some of them out there with no ethics will. if you do that, your buyer agent, who really has already worked hard for you without you even knowing it (because Realtors take all the complexities and make it simple for you, at their own cost--for everything they do on your behalf, in fact), your buyer broker will NEVER be paid. now who wants someone who works for them to never get paid? be sure your buyer broker explains what "agency" means: that your interests are above theirs (their commission) and that they will NEVER disclose any of your private information or negotiating tactics to the seller!

if i think of any other closing costs, i will attempt to make a new answer for you here. mostly, additional costs are reflected in the truth-in-lending statement that you will get from your lender. get it now please.

Answer 2

first, go finds a better rate! unless your credit is crap ( which you wouldn't get a $250,000 loan if it was) there is no reason to pay that rate right now when rates are as low as the 3.0%