Right, that's typical...as long as the appraisal supports the price, that's fine... It goes toward any remaining closing costs or prepaid costs (they'll collect X months of taxes and hazard insurance for escrow.) If there's money left over, you should usually get it back at closing, if the lender has proof that the check has cleared. You'll want to check with the lender as their policies may vary...also note that it will irk the hell out of them if you tell them "but some guy on the internet said..." Correct...the inspection covers your interests. Appraisal covers the lenders, i.e. if you default, what risk is there that we will not get our money back, are properties appreciating in that area, how long are homes usually on the market. The seller should be, I would think.... However, if it's an REO (bank owned, HUD repo) they sometimes will be selling "as is" and if anything needs to be done such as paying to have the utilities turned on, they will require the buyer to do it. I had a recent scenario (which the buyer wisely backed out of) where she would not only have had to pay to have the stuff turned on....but if she then hadn't closed on the property, she would have had to pay to have the utilities "winterized" again. Your lender should also be able to show you what it will look like if you pay that extra $80 toward your mortgage. Likely, you'll pay the loan off several years early, and save enough in finance charges to pay cash for a car. I always review bank statements and look for NSF charges, foreign ATM fees and the like. I can then show people "get this under control, and start going only to these ATMs (providing a list of ATMs which are in their network), and you can save this much over the course of your loan." It should be due July 1. There is usually a grace period until the 15th, after which they'll charge you a late fee. This will be specified in your paperwork at closing. This depends upon who will be servicing your loan. Sometimes they can deduct from your account. But, you need to make sure this actually gets done...if they make an error on it, you'll get late fees, and could spend a lot of time on the phone getting them to correct it. Look at the payment which 6.5% gives you...are you comfortable with it? If so, might as well just have them lock...one less thing to worry about.
Sounds great Tegleg! Depending upon the final costs, the $500 credit may just evaporate. I highly recommend a home inspection; this is where you learn the hard facts about the property. It is also where you will probably gain some concession from the seller for any repairs and fixes that need to be done. Go through the inspection with the inspector, take lats of notes. Pay close attention to the big items (i.e furnace, electrical, structural, etc.) Ask around for referrals as to a good home inspector. Your local building inspector in town can probably recommend a good one. The current owner should be responsible for the utlilities for the inspection. I would add it to the P&S Agreement. If he balks, then have them turned on in your name only for the short period of the inspection, then deduct the cost from the selling price. As for the insurance, you may want to check with your automobile insurer, you can usually get a "bundled" discount with a carrier you're already using. As for the mortgage payments, most lenders are set up for autowithdrawal, and this is a great idea. I HIGHLY recommend extra "principal" payments each month. This can ba an extra $25, $50, whatever you can comfortably afford. (Maybe the $80 from insurance!). Without going into all the financial calculations this is the largest money saving approach. Making one extra payment yealry does not have the same effect. Go to www.bankrate.com for some calculators to show you the savings. You would be amazed how much this shortens the life of the mortgage! I would lock in the interest rate now. The way the Fed and the market are going it is not worth the risk. Good Luck, and let us know how everything works out!
I am very happy! Got word this am that our FHA loan is totally approved with no conditions! YEEHAAAW!!! Inspection has been done and has passed! yay! We are currently awaiting appraisal to be done. If it passes we are golden and can close. Have made numerous calls to get home insurance quotes, will likely end up going with a local agent. I am thinking anywhere from 500-750 a year. Our GFE shows 750 and thats a city area base. The property is near a 1 acre lot. The house is vinyl sided, totallly remodeled in 2001, new roof 3 years ago. No foundation issues. It's 3 BR 2 full bath 1500 SF, newly painted, good carpet, shop out back is on a concrete pad, steel structure with windows and a sliding type garage door, shop has a small office, a BR w a shower and is very nice. It was advertised for 85K, we are seeking 88.4 for the appraisal so that seller will do down payment assistance. I dearly hope that it will appraise for that. Another home like this that was brick and about 200SF larger that also has a smaller shop but a smaller lot is listed as 100K, another house, brick with 300 more sf and a wood small shop was 97K. I am hoping it will appraise for the amount we are asking. I am not worried about the 500 credit, I will ask that any credit we have be applied to the principal. The interest rate was slighty below 6.5, they recommended locking and I did. If appraisal goes well we will likely try to close sooner in May, however the seller will have to fly in from Wyoming so he has asked possibly to have the date extended. I told his realtor I didn't mind doing it a week later if he would be acceptable to letting us start moving things in 05/01/07 and possibley take possession before 05/15/07 to save having to pay another months rent here. Don't know how that will fly, property is empty but until the papers are signed.......................... I am going to look at bankrate you listed, I had budgeted 820 per mth and it appears my payments will prob be right at 750. I am thinking of sending the extra 70 a month in on principal, I am interested to see what will happen. Thanks for the wonderful information! Tegleg PS! Holy Moly! That bankrate calculator is awesome!!! I inserted an extra 70 a month and a one time a year amount of 750 and it shortened the loan to 18 years!! That shaves 12 years off the loan!! Woot! That is awesome!
Tegleg, This may sound a bit like advice from the "old boy network", but do not be afraid to tell the appraiser what range you are looking for. Appraisal is not an exact science. The "comps" you exampled say you should be in the 90K-100K range. I would ask the appraiser what his ballpark figure after review of the home. Also, MAKE SURE YOU GET A COPY BEFORE THE CLOSING! Often, buyers do not request a copy, and the appraisal becomes a surprise at closing. You may have to pay for copying charges, but it is well worth it. Remember, YOU are paying for the appraisal, though the report goes to the lender first! Request a copy right up front.
Where we are, the buyer has the right to receive a copy of the appraisal by law, and there usually isn't any fee involved. Most of them are just in a PDF format so I have always been able to fire them over via e-mail. The lender and the appraiser should have already communicated regarding the value, even before the appraiser goes out. It's also notable that although the buyer is paying for the appraisal, it "belongs to" the lender. If someone is working with another lender and decides to switch to me just before the closing, I can't use their appraisal because it's made out to the other lender. The other lender has to give the appraiser permission to release it to me, and there is nothing obligating them to do so.
My point is the aspect of "right" to the appraisal. I am amazed at how many people do not actually exercise this right, and never request it. Since Teg is a new buyer, I did not want her "assuming" a copy may come to her. There is also the aspect of "managing" the appraisal. I am sure you have seen some that were done a bit sloppy. I know I had to "manage" one done on my home. The appraiser did not bother to check recent transactions (during the real estate boom), and the appraisal was "way off". The appraisal was "communicated to with the lender", and was higher than needed, but it was still way off. I had to have the appraiser redo it. In summary, in my own experience, I would not have known of the "miscalculation" unless I had formally requested a copy.
My hubby plans to be present at the appraisal, we will ask the appraiser for the results and a copy of it. I hadn't thought of that till y'all mentioned it. Very good advice thank you! Home insurance is driving me buggy! It takes forever to get a quote and the 2 I have gotton so far, Germania and Allstate are sky high. Even geico was high. I am waiting on a quote from the place where I have my auto insurance. I hope it is much better otherwise I will need to contact others. We are having haggles with the seller about the closing date & the fact they still have some personal property left. Thier realtor called and said the seller would likely want the closing date moved up a week or two from the contracted date of 05/16/07. And that they will likely not get thier stuff till after closing. I am open to that only if they agree to let us move in on or before 05/16/07 because we have already been making arrrangments and have things planned for that date. The contract says 05/16/07. As for their stuff it needs to be gone when we take possession of the house. If they can't have it out by then then they need to give us permission to move it out to the shop till they can come get it. This is a bit of a rant and I apologize but it seems like, to me anyways, that if you have vacated the property already (not living there) and you are selling and contracted then maybye you oughta get yer gear out, ya know? And I called the realtor today to ask if I could get in the property to measure some appliance areas since we are buying a new stove & frig, he heehawed and hohummed around not wanting to let me in. I finally had hubby to call him, hubby can get those type of things taken care of lol. Oh well, it's minor in the scheme of things, just frustrating. Thanks! Tegleg
As for the homeowner's insurance, you may want to try State Farm. Also, when getting these quotes, ask about the price IF you moved your auto insurance to them also. You'll probably find a discount on both. It's also a great idea to ask all your homeowner friends and coworkers what insurance they have. Asking around is a great way to find the best rates. Regarding the closing date and owner's things, these things do happen at closing time. I suggest that you agree to move up the closing date, and let them keep their things there until they can get them, but....I would negoatiate either 1) they let you move tings in sooner (without paying prorated rent) or 2) you charge them rent/storgae fees for the time until they pick up their things. If you feel the owners have worked with you well, then you should cut them some slack, but if they've been a bit "adversarial or difficult", then charge them storage fees.
Unfortunatley State farm is no longer writing any new home policies. I have a couple of more quotes so far the best is 900 a year (auto discount)and I will prob have to settle for that. Gotta have insurance..bah. We are willing to work with the sellers as much as we can if they want to bump the date a week or two later then they will have to allow us to move in earlier. If they refuse to let us access the house before it closes I will hold them to the contracted date or at worst get into haggles about thier stuff and prorated rent etc etc. I honestly don't think they want to deal with that and we don't either. They seem like nice people and we are too. Now I hear from the lender that the appraiser hasn't been out yet because he is doing the groundwork and can't find any computer listings to value the asking price of 88.4K in the area. He is talking to the realtor to see how the realtor calculated the asking price. We live in a small rural town I guess that is the reason, and our house is prob the nicest on the block. I hope this won't be an obstacle.....acck! Thank you! Tegleg
