Chance Gates' Blog

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By Paige Tepping

RISMEDIA, August 26, 2010–You wouldn’t buy a house without shopping around first, right? Then why would you commit to the loan you use to buy that house without making sure you’re getting the best deal possible? From the experts at LendingTree, here are six reasons why it’s essential to take a few minutes to browse before you borrow:

1. To get the best interest rate possible
Over the life of a $200,000, 30-year fixed rate loan, a one-tenth of a point difference in interest rate could save or cost you thousands of dollars.

2. To pay lower loan fees
Once your loan application is accepted, the lender will get back to you with a good-faith estimate (GFE), including an itemized list of all the costs associated with the loan. If there are any parts of the GFE that you don’t understand, don’t be afraid to ask the lender to explain each fee that is listed.

3. To avoid a prepayment penalty
In these transient times, it seems no one stays in their home long enough to pay down their mortgage the old fashioned way: in monthly increments over a period of decades. So you’ll want to be clear on whether the terms of your loan include a penalty if you pay off your mortgage early—either because you move or refinance.

4. To find a lender you feel comfortable with
You don’t want any surprises popping up at closing time. Get a lender who is responsive to your questions and is willing to give you the details in writing.

5. To find a lender that specializes in your situation
Recent volatility in the mortgage markets means that people with bad credit or little money for a down payment might have to look a little harder to find a lender.

6. To get the rate lock period you want
Once you’ve found the lender offering the best mortgage rate and terms, you’ll want to get a written commitment, known as a “lock” that puts in writing that the lender will make the loan to you at that the specified interest rate. The length of the lock can vary from 30-90 days, but many lenders will charge a fee for a rate commitment of longer than a month. Negotiate the lock period that is right for you, depending on when you plan to close on your new home and if interest rates are expected to creep higher during that time.

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  Please feel free to use my back door to the MLS and search house available in the Reno/Sparks and all Northwest Nevada neighborhoods.  I can be reached by email @  chance at ballard-company.com or http://www.myspace.com/chancegates

RESPA Reform

The Objectives:

1.)  Help consumers shop for the best loan, through competition bring lower prices.

2.)  Disclose to consumer, the loan information quickly in an easy to understand format.

3.)  Facilitate comparison of Good Faith Estimate (GFE) and HUD-1 or HUD-1A Settlement Statement.

THE GOOD FAITH ESTIMATE (GFE):

1.)  The lender has 3 days after receiving a complete loan application to provide the buyer with a GFE.

2.)  The buyer has 10 business days to review the GFE.

3.)  Page 3 of the GFE must have a “Shopping Cart” to allow the borrower the ability to compare terms and conditions.

THREE TYPES OF GOOD FAITH ESTIMATE FEES

1.)  Zero Tolerance are fees on the GFE that may not be exceeded at closing.

2.)  10% Increase Permitted are fees that the total aggregate of all charges are subject to a 10% tolerance.

3.)  Unlimited Change Permitted are fee that HUD does not limit the amount of increase

Other terms and conditions may apply please contact a Nevada real estate professional to answer any questions  that you might have.

When buying a home it is important to remember the cost.  The days of 103% financing with nothing down are behind us for the most part.   So what will a buyer need to pay at closing?

The easiest place to start is the down payment; most FHA loans require 3.5% minimum. Every lender will require an appraisal, to determine the market value of a house. To get a complete cost of what a lender is going to charge ask for a good faith estimate.   Lender title insurance policy is another lender requirement.

A buyer should always know the condition of the home he/she is purchasing.  This can be accomplished by getting everything inspected by a licensed professional.   A home, pest, septic, and well are the common inspections, however there are more.   I do not recommend cutting costs by skipping the inspections.

Escrow fees and transfer tax are usually (not always) split.  Escrow fees are based on the purchase price and will change.  The Washoe County transfer tax is $4.10 per every thousand of the purchase price.   For example:

$100,000 house would be 100 x 4.10 = $410.00

There can be other costs such as a home warranty, property taxes, garbage fees, etc…

There can be many tax benefits, to homeownership. In today’s lending climate, it would be difficult to get into the predicament that many current homeowners find themselves in. However, homeownership is a big and costly responsibility and not one to be taken lightly. You should consult with your accountant, financial advisor, and lender to be sure that you are aware and able to meet the necessary monthly, yearly, and future financial commitments required in homeownership

As a Reno/Sparks real estate professional I encourage all questions and comment on the Reno/Sparks real estate market or any article posted.  I can be reached by email at chance@ballard-company.com or http://www.myspace.com/chancegates