What are Recurring and Non-Recurring Closing Costs?

What are Recurring and Non-Recurring Closing Costs? For many buyers, closing costs can seem complicated. Buying a home itself is already such a large, complicated purchase, and when closing costs and terms like “recurring” and “non-recurring” are thrown into the mix, it’s easy for buyers to get overwhelmed. Let’s go over recurring and non-recurring closing costs so you understand closing costs when it comes time to close on your new home. First off, you’ll find information about your recurring and non-recurring closing costs in your loan estimate. When you get approved for a mortgage and start the closing process, your lender will provide you with a loan estimate. Your loan estimate includes specific information about your closing costs and your monthly mortgage payment. Within your loan estimate, you’ll see that you only have to pay some closing costs once. These are non-recurring costs. These costs include your escrow and closing fees, attorney fees, appraisal and home inspection costs, lender loan fees, a home protection plan, and your title insurance policy. There are other costs that you may end up having in this category, but the important thing to remember is that these costs are a one-time deal. Once you pay them during closing, you won’t have to pay them again (unless you buy another house). However, some closing costs need to be paid more than once. These are referred to as recurring costs, since they happen repeatedly. Recurring costs include your property taxes, your private mortgage insurance premium, prepaid interest, and flood insurance and fire insurance premiums. Recurring costs are typically wrapped into your monthly mortgage payment. You might not think about them often, but it’s important to know that they’re there. Your lender should walk you through all of your closing costs and the different elements of your loan estimate. Remember–if you have any questions, all you have to do is ask your lender or your real estate agent. I’m also here to help.

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3 Simple Reasons to Get Pre-Approved

3 Simple Reasons to Get Pre-Approved If you want to successfully become a homeowner, getting pre-approved is one of the best first steps you can take. But sometimes buyers, especially first-time homebuyers, think that getting pre-approved is just another random thing to do. Getting pre-approved is anything but something random or optional. In fact, it’s a key step to finding the right home for you in our current market. When you get pre-approved, a lender will take a look at your financial information and give you an estimate of a mortgage that you could get approved for. A pre-approval basically says that with your current financial situation, you’ll be able to get approved for a home loan of a certain amount. Clearly, this is great information to have, but let’s go over 3 of the reasons why you should get pre-approved. 1. It doesn’t cost you anything. Getting pre-approved is free, and you’re not locked into anything with a lender. In fact, you can go to multiple lenders and see what kind of deals on rates they can offer you without spending a thing! 2. It allows you to plan for your future goals. You’ll be able to see how much of a mortgage you can afford when you get pre-approved. From there, you can take that information and use it to decide how much you want to spend on a house while keeping your future investments in mind. 3. It educates you on your loan options. When you get pre-approved, your lender will show you several different loan options that may work for you. You can take that information and find out which loan is the right fit for your current situation. Sellers also love to see buyers who are pre-approved. They’ll know that you’re prepared to buy, which can make them more likely to work with you on negotiations and concessions. We can send you the contact info of some amazing lenders who can help you start the pre-approval process. Just send us a message and we'll help you get started on the pre-approval and homebuying process!    

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