Mortgage closing costs have risen 6% over the past year, according to a recent Bankrate.com report — averaging $2,539 on a $200,000 loan.
But mortgage closing costs aren't set in stone. Especially in today's market, you can definitely negotiate your origination and lender fees. It's like any other service. They have the power to give you a discount, if they want to. Don't just settle for whatever you're quoted for mortgage closing costs when buying a Columbia SC home.
Here are 5 Ways to Lower Your Mortgage Closing Costs
Get Multiple Quotes – Going with the first lender you call is like going with the first car insurance quote, or the first car you test drive — there might be a better deal or car out there. Get estimates from at least three lenders. You're looking for the total package for evaluation—interest rate plus closing costs. You'll generally be able to get those numbers by providing a few financial basics over the phone.
Compare Mortgage Closing Costs Carefully – This may be harder than it sounds, since lenders call similar fees by different names. They may lump certain things together that other lenders list separately, and include and exclude certain third-party costs, such as homeowners insurance. Your best bet is to ask for a GFE, or Good Faith Estimate, which lists each individual fee. It's the clearest way to see what each lender is charging you.
Ask About Fees – Make your lender walk through each charge with you and discuss what it includes. Some third party charges, such as appraisals and credit report fees, are pretty set in stone. Other costs, such as title insurance, legal fees, and rate lock fees vary more frequently than not. (Title insurance varies so much from state to state that some lenders don't even include it in their numbers. It's also something you can shop around for. You're not forced to take whatever quote you're given. Another charge to watch out for: Courier fees. In today's world of technology, unless the lender has been sending papers around for signature via delivery service, you can have this one nixed. Most use email and fax for signatures these days.
Watch For "Junk" Fees – Junk fees are fees a lender will charge that are negotiable, that they can take out or leave in. These might include things like application fees, underwriting fees, and loan processing fees, among others. If they seem vague, they probably are. Sometimes when you question the more ambiguous charges, they can be lowered or eliminated.
Ask for Discounts the Competitor is Offering – Go ahead, pit lenders against each other when getting quotes on your mortgage closing costs. If one lender is offering a deal, ask other lenders if they can match it. You may be surprised when a competitive market results in a smaller bottom line.
So there you have it. Our list of 5 Ways to Lower Mortgage Closing Costs when buying a Columbia SC home.
Stay abreast of all the tips and tricks affecting your ability to obtain a mortgage and lower your mortgage closing costs here at our website. More articles regarding Columbia SC mortgages can be found by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
Columbia SC mortgages may be easier to get soon. A new calculation of credit scores will soon make it easier for millions of Americans to qualify for car loans and credit cards. The new methodology also could provide easier access to Columbia SC mortgages after tight post-recession lending standards shut millions of potential new homebuyers, particularly young Americans, out of the market.
The Fair Isaac Corp., which issues credit scores used in 90 percent of U.S. consumer lending decisions, says it will give less weight to unpaid medical bills when assessing creditworthiness, starting this fall. It also won't penalize a borrower's credit score if they've had bills settled with a collection agency.
FICO Changes for Columbia SC Mortgages Great for Consumers
Under FICO's current methodology, many potential borrowers either have been flat-out denied access to credit or forced to pay higher interest rates. Matt Fellowes, CEO of workforce optimization firm HelloWallet and a former Brookings Institution fellow, calls the changes "terrific improvements for consumers."
The revisions weren't necessarily a response to people's failures to pay medical bills, but rather intended to address punishment for bills they might not even know they had.
Over half of collections on credit reports are associated with medical bills, according to the Federal Reserve, and a May Consumer Financial Protection Bureau study found that some credit scoring models may overly penalize consumers because of medical debt. The score disadvantage – up to 25 points – could cost someone tens of thousands of dollars in interest over time on bigger loans like Columbia SC mortgages.
This move will ultimately make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher rates for Columbia SC mortgages because of flawed credit scores.
The advice from most mortgage professionals to first-time home buyers is to begin sprucing up their credit at least six months before applying for any Columbia SC mortgages. FICO scores seen by lenders are not what are sold to consumers by the three national credit reporting agencies. The only way consumers will know for sure how their credit looks to lenders is by applying for pre-approval or filling out a mortgage application.
Check out our other articles and news affecting Columbia SC mortgages by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
When buying a Columbia SC home, obviously a job is an important cog in the wheel to obtaining a mortgage. But the lending game is full of misconceptions about job gaps, job changes and occupational changes within the course of an employment time frame. Yes, you CAN get a mortgage if you switched jobs or even changed industries, you just have to approach it the right way to get the deal approved.
When determining your ability to pay (and therefore determining how much Columbia SC home you can afford to buy), a lender will calculate your average income based on your pay from the past 24 months. It’s pretty straightforward and simple if you’ve had the same job and same income and pay structure, but if any of those things changed in the past two years — or will change soon, you may face challenges when trying to get a mortgage.
Don’t Change Jobs When Buying A Columbia SC Home
In the past, lenders were ready to refuse loan applications where there was a job or industry change. We even tell prospects looking at buying a Columbia SC home not to change jobs before applying for their home loan. While this is the case for most situations, it is not necessarily so black-and-white.
If you’ve had a job change, no matter what, a lender is going to need the following things from you — and your employer — in order to close on a mortgage: an offer letter, a role change letter if you have a title change and commensurate compensation package change, and the most recent pay stub and verification of employment.
If you can’t provide a pay stub with year-to-date income (usually a 30-day pay stub depending on your specific lender’s requirement), along with a letter detailing the change, you likely won’t get approved for the loan. Let’s say, for example, you are looking at buying a Columbia SC home and you know in the next four months your income is going to increase to $6,000 per month because you’ll have a new role within your company. In order for that $6,000 per month income to be used in the calculation, you’ll have to get the details of the raise, including the role change letter and at least one pay stub.
So if you are thinking about getting a mortgage, even if it is further down the road, consider starting discussions with a lender now so you can be guided through any income bumps the past or future may hold. It is especially critical for homebuyers to get pre-approved with a lender upfront prior to house-hunting. This process includes allowing a lender to review your credit, debt, income and assets to assess your ability to qualify. When buying a Columbia SC home, being pre-approved greatly increases your chances of getting a yes from a seller.
This is also a good time to start looking over your credit reports and checking your credit scores so you can address any problems in advance of applying for a mortgage.
Stay abreast of all the tips and tricks affecting your ability to obtain a mortgage and buying a Columbia SC home here at our website. More articles regarding Columbia SC mortgages can be found by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
Many lenders in the Columbia SC housing market fear another ticking time bomb may be looming on the horizon as a result of homeowners with home equity lines of credit that will soon be changing how much they pay each month.
Some lenders see the problem as potentially triggering some of the same issues for borrowers that led to the housing bust in the 2000s, even though the years of scrutiny and regulatory efforts that followed that bust have made the financial system a lot safer.
In many cases, homeowners got mortgages with low introductory teaser repayment rates, allowing them to qualify for larger loans because of their lower upfront payments. However, many of these mortgages had provisions that called for sizable increases in monthly payments within a few years.
When the Columbia SC Housing Market Collapsed
As long as the Columbia SC housing market remained hot and prices kept rising, homeowners had the option of selling their home and reaping a sizable capital gain in the process. But when Columbia SC home prices fell and the Columbia SC housing market was flooded with homes, those who had taken those mortgages found themselves underwater, with no way to sell, and frequently no way to handle their loan payments.
Regulators have, since that time, targeted negative-amortization and interest-only mortgages. Lenders now must require borrowers to demonstrate their ability to repay those loans even after reset-provisions take effect and boost monthly payments.
With many home-equity lines of credit approaching that 10-year milestone, banks now worry about the impact of those much-higher monthly payments on borrowers.
Many lenders have moved most of their customers toward home-equity lines of credit that require early repayments of principal. The hope is that customers will get used to relatively flat payments based on the amounts they have outstanding, rather than facing the sticker shock that an abrupt change in repayment terms during the course of the home-equity line of credit can cause.
Even if home-equity lines require principal repayment, only those who've already maxed out their lines will have to figure out how to get money from elsewhere to make the resulting higher monthly payments.
Despite all the new regulations aimed at the mortgage market, in the end, it will take responsible money management from borrowers to ensure that home-equity lines of credit don't create the same trap for the unwary that ordinary mortgages did in the run-up to the Columbia SC housing market collapse.
Check out our other articles and news affecting the Columbia SC housing market and the mortgages that support the market by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
Prospective Columbia SC home buyers are seeing the housing market continue to recover, with home prices in some areas rising as much as 13 percent over the past year. The rise in home prices has helped a lot of homeowners get out from being underwater on their mortgage. Leftovers from the housing crisis however continue to make it too hard for families to access the credit they need to purchase a home.
Prospective Columbia SC Home Buyers Struggling With Credit
Many would-be Columbia SC home buyers are still struggling with credit histories that should make them eligible for mortgages under normal circumstances, but they are still unable to find lenders willing to approve them for a mortgage at an affordable rate.
Estimates from Moody's suggest that if the acceptable credit score reverted to the more traditional and sustainable standards that existed prior to the housing bubble, then the pool of potential mortgage borrowers could increase by more than 12.5 million households nationwide.
The Federal Housing Administration (FHA) and the Federal Housing Finance Agency (FHFA) took important steps recently to ensure that more responsible, creditworthy families can obtain a loan when they're ready and prepared to become Columbia SC home buyers — while ensuring we don't return to the days of unsound lending practices. These steps respond to a basic question presented in the mortgage data: If responsible borrowers have a credit history that should make them eligible for loans — especially in a housing market and an economy that is growing stronger — why haven't these loans been made?
It seems that a perceived lack of clarity by lenders about how mortgage guarantees will be treated has made them more cautious in lending to eligible borrowers with credit histories that are anything less than perfect.
The new rules coming down the pike would provide FHA assurance that loans that meet their credit guidelines can be originated without fear of penalty and announced additional benefits to borrowers who receive housing counseling services. The FHFA gave new clarity as to the circumstances under which lenders would be required to repurchase defaulted Fannie Mae- and Freddie Mac-guaranteed loans.
Some Columbia SC Home Buyers Already Seeing Benefits
Already some lenders have lowered the credit score they are willing to accept for government-guaranteed loans for Columbia SC home buyers.
The bill known as the Housing Finance Reform and Taxpayer Protection Act of 2014 hopes to complete a major piece of unfinished business from the financial crisis. This bill should help more prospective Columbia SC home buyers be able to find a lender willing to underwrite the mortgage needed to finance a home purchase.
Check out our other articles and news affecting Columbia SC mortgage rates and how rates and qualification requirements can help more Columbia SC home buyers by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.