Down Payment Assistance New Mexico

Down Payment Assistance New Mexico

Closing Costs Outlined

As a purchaser of a home what are some additional fees that you might need to budget for as part of the overall home buying purchasing process that’s in addition to the money that you save for a down payment.

So when budgeting a number that you might need to set aside in order to pay the fees associated with closing on a home when you purchase it, I like to use a number around three percent as a guide. So you can use three percent of the purchase price of the home. So for example if you have a home that you’re purchasing for three hundred thousand dollars three percent of three hundred thousand dollars would be nine thousand dollars worth of potential closing costs. Now of course these costs can vary widely depending upon where you live, what the business norms are in your area, the type of market that you’re in, but as a guide I think three percent will work well for you.

So to help clarify the fees that a buyer might pay when purchasing a home, I like to break it down into four categories. The first category is lending fees. These fees that are being applied by the lender that’s helping you get your loan for your home. The second fee are title fees. The third fee is what we call prepaid fees and a fourth fee relates to inspections that you perhaps might want to get.

So for that first category of fees, lending fees, those can be some of the more significant more substantial fees as part of your overall closing costs when purchasing a home so Susan and I always recommend of course you always ask about the interest rates that the lender is going to charge and we always recommend asking about their service or their performance but how quickly they can close on a loan and then importantly ask them number three what are your fees associated with helping you get the loan.

So the second category of fees are the title fees and that’s what you’re going to be paying to the title company so that they will insure and do the hard work necessary in order to make certain that you’re going to get clear and free title to the home.

So the third category I mentioned are prepaids. So what in the world are prepaids? Those are going to be essentially three items and the first item is going to be an annual insurance policy – so the typical policy that you would have and protect your home against fire and theft. You’re going to be asked to pay for an annual one that will cover your home for 12 months. And in addition to that your lender is going to ask you to pre-fund your escrow account a certain number of months. It’s very common for that to be three months or four months and so you will put money into your escrow accounts for taxes and insurance so that when those come due in the next six to 12 months you’ll have pre-funded that account that can draw the money out of.

So the fourth category that I mentioned are inspections of course it’s always recommended for a buyer to do their due diligence and have a home inspected by qualified professionals prior to closing just to make sure the home is in the condition that you want to accept it in and those expenses are always paid prior to closing on the home.

Down Payment Assistance New Mexico – Additional Ideas

So now that we’ve gone through the types of expenses and a general idea of how much money that those expenses could add up to when you’re purchasing a home I promised I was going to give you a couple ideas to perhaps how to come up with some of those funds.

The first idea is to negotiate. It’s possible depending upon the circumstances of your unique transaction that a seller may be willing to help pay for some of your closing costs so again it can vary widely depending upon a wide variety of factors whether or not a seller would be willing to do that but sometimes they will.

The second idea is to look into financing entities that are available in your state that are in the business of helping those purchase homes who potentially are having trouble coming up with the necessary cash in order to purchase the homes. They usually look at a certain type of credit score bracket as well as an income bracket as long as you fit within those categories they will help you come up with the funds necessary in order to close on a home.

So if you have any questions about buyer closing costs be sure to reach out to Susan and I our contact information is below. It will be a pleasure to connect with you

Contact Us about Down Payment Assistance in New Mexico

We are happy to talk with you more about the programs that are available to help you on your home purchase journey.