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After you decide to buy a house, your first step should be to talk to a mortgage lender. Knowing what you can afford, how you can improve your credit, and the state of your financial situation overall is crucial in getting the home you want. With that in mind, I’ve invited mortgage expert Eric Marcotte of Peoples Bank to join me today to answer a few mortgage FAQs and talk about each step of the mortgage process. I hope this conversation gives you the guidance you need to become the best buyer you can be. If you’d like to reach out to Eric, you can give him a call at (219) 838-9101. If you have any questions for me, feel free to email me or give me a call. I’d love to help you.
There are a number of reasons a buyer might ask for a seller to cover the closing costs, but is this arrangement really as common as HGTV makes it seem? Yes and no. When a seller does cover a buyer’s closing costs, these funds are usually taken out of the total list price rather than paid out directly.
Sellers cannot contribute to the buyer’s down payment.
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Also, it’s important to realize that down payments aren’t included in these “closing costs.” Instead, closing costs in this case refer to additional expenses like title fees, escrow fees, insurance, and more. The reason this distinction matters is that sellers cannot contribute to the buyer’s down payment. The buyer must provide these funds themselves. So when a buyer asks for closing costs, they aren’t actually asking that every bit of their closing-related expenses be paid by the seller. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.
What happens when your appraisal comes in low? Let’s consider this question through the eyes of a buyer. Once the inspections and repair requests are squared away, the bank will order an appraisal, which serves as a professional opinion of the home’s market value. The bank will send an appraiser out to the property, and that person’s job is to certify that the price in the purchase contract and the home’s actual value are in line with one another. If the appraiser can’t justify the price, it’ll either be too high or too low. If the appraisal ends up being higher than the offer price, there’s no issue. The buyer will receive greater equity than originally expected, and the parties can move through closing without a hitch. An appraisal that comes in low, on the other hand, can be problematic. One of three things will happen following a low appraisal: 1. The seller takes a price reduction 2. The buyer brings more money to closing 3. A combination of the first two options If no agreement is reached, the contract will be rendered null and void because the buyer won’t be able to obtain the loan they made arrangements for.
An appraisal that comes in low can be problematic.
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I’ve seen it play out in different ways: I recently saw a seller take a $13,000 price cut for the sake of saving the deal. I appreciated it because I was representing the buyer in this particular transaction. In another scenario, one of my buyers made an offer on a home that appraised low. They felt that the home warranted a higher appraisal, and together we fought the appraiser on it. Despite our best efforts, the buyer ultimately chose to bring more money to the table to secure the home. If you’re getting ready to purchase a home and you have any questions about appraisals and how they work, please give me a call at 815-931-2279 or send me an email at Edward.Pluchar@Gmail.com. I’d be happy to hear from you!
