Mortgage Costs

Your down payment is the money you put down to buy your home. This amount goes towards your purchase price in the form of equity. The myth that you need to put down 20% to qualify is not true. First time home-buyers can put down as little as 3%. The more money you put down, the lower your loan-to-value and total monthly payment will be.

Tip: Our licensed Loan Pros will assist you by recommending a suitable down payment based on your financial situation and goals.

Closing costs are costs paid to third parties and are standard in all mortgage transactions, such as title/attorney costs, appraisal, taxes and escrows. Based on your situation, there may also be specific lender fees included, such as underwriting/commitment fees. You may also have an opportunity to obtain a lower interest rate by paying ‘points’. Points (sometimes referred to as a ‘buydown’) is simply a fee paid in exchange for a lower interest rate.

Tip: When applying for a mortgage, closing costs will be disclosed on your initial loan estimate – giving you an idea of the total amount you will need in order to buy your home.

When buying a home, you have to pay interest at closing for the remaining days of that month, beginning on the day you close. For example, if you closed on April 16th, you will have to pay 15 days of prepaid interest at closing for April 16th-30th. However, your first payment wouldn’t be due until June 1st, as monthly payments cover the interest from the previous month. Think of prepaid interest as the ‘rent’ for living in your new home during the month in which you close.