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Old 05-24-2015, 01:25 PM
 
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What are the costs that have to be paid before closing on a home?

I know you might have to put earnest money down

I know you have to pay for inspection,

are there any other upfront moneys that can't be put into the loan or closing?
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Old 05-24-2015, 04:01 PM
 
Location: NC
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In NC we have a due diligence fee. It is a negotiable smallish amount of money that essentially buys you time to examine the property more carefully. Usually it is less than $500. That is not refundable. The earnest money is not really a down payment, but if you abide by the contract it will either be returned to you (if the contract becomes null due to one of its stipulations) or it will be used as part of the downpayment at closing. Other than that, all of your inspections are paid by you.
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Old 05-24-2015, 04:10 PM
 
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Originally Posted by luv4horses View Post
In NC we have a due diligence fee. It is a negotiable smallish amount of money that essentially buys you time to examine the property more carefully. Usually it is less than $500. That is not refundable. The earnest money is not really a down payment, but if you abide by the contract it will either be returned to you (if the contract becomes null due to one of its stipulations) or it will be used as part of the downpayment at closing. Other than that, all of your inspections are paid by you.
What about the survey and appraisal fee? Is that paid up front or could that go into the closing costs?

and what if the loan does not go thru, do you still have to pay the appraisal cost?
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Old 05-24-2015, 04:21 PM
 
Location: NC
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You only pay an appraisal fee if you want one--not mandatory, but usually well worth it, even if you are paying cash (unless it is a unique, one-of-a-kind property that you want regardless of appraisal value).

As for a survey, you can pay for one if you want to, but most often you ask the seller to provide either a survey map or a copy of the plat. The plat is a drawing of the boundaries of the property that is used by the county. Most people are satisfied with a plat, but the survey will give more info (and costs more). Most home owners have never had an official survey done. An appraisal or a survey would be money that you would pay separately from your loan amounts.
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Old 05-24-2015, 04:45 PM
 
Location: Denver CO
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Originally Posted by luv4horses View Post
You only pay an appraisal fee if you want one--not mandatory, but usually well worth it, even if you are paying cash (unless it is a unique, one-of-a-kind property that you want regardless of appraisal value).

As for a survey, you can pay for one if you want to, but most often you ask the seller to provide either a survey map or a copy of the plat. The plat is a drawing of the boundaries of the property that is used by the county. Most people are satisfied with a plat, but the survey will give more info (and costs more). Most home owners have never had an official survey done. An appraisal or a survey would be money that you would pay separately from your loan amounts.
I've never heard of an appraisal being optional - mortgage lenders require it to make sure the house is worth the amount they are lending you.
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Old 05-24-2015, 05:04 PM
 
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First, each loan type has its own associated costs that a Buyer and Seller are to pay. In a purchase, the Appraisal fee is a Seller paid item. It is their responsibility to prove the value of their home. The only time you would pay an appraisal fee is if you are refinancing your home. A credit report fee can be charged and collected for up front. If you are refinancing and you pay an appraisal and credit report fee, if you do not close escrow on the loan and the appraisal and credit report have been completed, the lender will keep the fees collected. You are entitled to a copy of the full appraisal if you paid for it. A lender cannot keep more money than was charged for those items though, and must refund any unused portion to you.

As far a survey goes, if there has already been a survey on the property in the past, it should already be recorded and attached as part of the abstract or legal description. The title company would be able to tell you if there is a survey on record. A property inspection could be an option up to you or a condition required by the appraiser if they feel the need for it. If it is an option for you, you will have to pay the inspector if you want to be sure that you are getting a structurally sound and safe property free of any major defects that would require repairs in the future. I personally recommend having a full property inspection. The cost of one is nothing compared to walking into a money pit situation.

Up front fees for a rate lock can also be associated as an up front fee, although that is not a very common item to be incurred. Especially with as low as rates are these days.

Are you purchasing or refinancing? What state are you located in?
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Old 05-24-2015, 05:18 PM
 
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Originally Posted by Truckergirl702 View Post
First, each loan type has its own associated costs that a Buyer and Seller are to pay. In a purchase, the Appraisal fee is a Seller paid item. It is their responsibility to prove the value of their home. The only time you would pay an appraisal fee is if you are refinancing your home. A credit report fee can be charged and collected for up front. If you are refinancing and you pay an appraisal and credit report fee, if you do not close escrow on the loan and the appraisal and credit report have been completed, the lender will keep the fees collected. You are entitled to a copy of the full appraisal if you paid for it. A lender cannot keep more money than was charged for those items though, and must refund any unused portion to you.

As far a survey goes, if there has already been a survey on the property in the past, it should already be recorded and attached as part of the abstract or legal description. The title company would be able to tell you if there is a survey on record. A property inspection could be an option up to you or a condition required by the appraiser if they feel the need for it. If it is an option for you, you will have to pay the inspector if you want to be sure that you are getting a structurally sound and safe property free of any major defects that would require repairs in the future. I personally recommend having a full property inspection. The cost of one is nothing compared to walking into a money pit situation.

Up front fees for a rate lock can also be associated as an up front fee, although that is not a very common item to be incurred. Especially with as low as rates are these days.

Are you purchasing or refinancing? What state are you located in?
I'm in Florida and getting a FHA loan for an inexpensive home, it's too expensive in the part of Florida I live in so I have to look 2 or 3 hours away.

So I think there are 2 inspections, a regular one and an FHA one which is to make sure the home is inhabitable such that a tenant would be able to occupy it, and the roof has to have at least 2 years left on it.

I never heard that about the appraisal fee, but if the seller pays it, it would be great. I think the bank I went to get pre approval included it in the closing costs but they also included the Owner's title fee in the estimate.
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Old 05-24-2015, 05:20 PM
 
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Earnest monies are credited at closing. And the allowable and non allowable closing costs are determined by the loan type. VA loans allow fewer things to be paid by the borrower. Most items can be financed into the loan. Non financed items are minimal. The loan will be calculated off of the appraised value if you are paying over valued price. That has to be paid in cash at closing.
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Old 05-24-2015, 05:41 PM
 
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Yeah, when a lender is doing their up front Truth in Lending and Good Faith Estimate, their charges can be off by quite a bit. The loan officer/originator does their best at these calculations, but I have seen a lot of "doosies" on these disclosures. The figures are not "set" in stone until closing.

So, I did a quick Google, since I have been out of the Mortgage business for a couple of years now...and it does appear that FHA has changed what they allow a borrower to pay. I guess that the ONLY fee that a buyer CAN'T pay , is the Tax Service Fee. So it is important to have a very detailed sales contract when you find that home you want to buy. If you don't write in that the Seller is to pay for all repairs if there are appraisal conditions for repairs, then it will be up to you to pay for said repairs. These repairs are normally required prior to closing. I personally am a bit floored that they would allow such craziness lol. But I guess that you CAN pay for the appraisal as the Buyer in a FHA transaction....
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Old 05-24-2015, 06:42 PM
 
Location: NC
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My last property purchase, I, as the buyer, paid the appraisal fee. I did not need to show it to the seller either. There is no need for an appraisal if the purchase is going to be paid by cash out of the buyers pocket. That is, no lender involved.
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