When looking for the right home, we are extremely diligent and sometimes it can be a process that takes months and even years. However, sometimes this diligence goes right out the window with choosing a mortgage when it is a process that demands just as much attention. In years gone by, there has been many people who overpaid for their mortgage or quickly fell into a common trap but we are here with some advice today!
So what are the main costs involved in acquiring a mortgage? Often, we look at the monthly payments moving forward but we forget that there are various other costs involved. Starting with the basics, every mortgage payment has what we call the ‘principle’ and the ‘interest’. Although fairly self-explanatory, the principle comes from what you borrowed initially with the interest being added on top. Therefore, the interest you pay on each payment is the first major cost and, at Benson Mortgages, we work to find you the best rates so you are paying off more of the mortgage each time rather than just chipping away at mostly interest.
Before you even purchase the house and get settled, you will have to ‘close’ on the property too and this is a process that many dread; not only because it can be confusing, but also because it can be stressful and costly. In truth, these costs will vary depending on your location, your mortgage type, and the type of property. In general, you might see an application fee, attorney fee, courier fee, Home Owners Association transfer fees, homeowners’ insurance, title insurance, pest inspection, appraisal, closing fee, taxes, survey fee, and more (this is a lot of money!).
With all of these costs, licenses, insurance policies, and taxes to worry about, it can be stressful but we look to take the pressure from you with everything involved in your mortgage. After working with you to find fantastic rates, we will help you to get settled in your new home and ensure that everything goes to plan.
As we mentioned previously, closing costs are approached with caution because they can be very different from one case to the next. Furthermore, some sales will see the majority paid by the buyer whilst the seller will take the majority of costs in another sale. For example, the appraisal is sometimes paid by the buyer and sometimes by the seller depending on the circumstances.
If you are currently deciding on a mortgage right now or are thinking things though, first we always recommend a consideration of closing costs. For a mortgage of $300,000, it doesn’t take long for another 10% to be added on top of this once all is said and done. However, Benson Mortgages will assess your finances and ensure that there won’t be any nasty surprises when you sign that final contract.
After first meeting with you, we can discuss your finances, exactly what you need, what timeframe you have in place, and more. Since we also work with private investors, this is another avenue we can explore and the costs are significantly reduced here because you won’t fall under the same regulations as working with a bank.
Regardless, feel free to contact us today and we will help you to get started. At every stage in the process, we can discuss costs and how much you will be paying so you aren't left in the dark. With this in place, you can get the home of your dreams with a great mortgage!