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Closing Costs: What do I pay when I buy a house?

Closing Costs: What are they? Who sets them? How much are they?

First time Home Buyers often assume their down payment is their only closing cost. With certain first time home buyers assistance plans, this can occur, but it rarely happens. So for many, the costs found on their Closing Disclosure shock them. This week, on Mortgage Mythbusting, I’m explaining closing costs, how to prepare for them, and how to ensure no one takes advantage of you. Here at The Jeff Stempler Team we believe every buyer should arrive at the closing table educated and confident.

Closing Costs Categories: 

 A. Origination Charges: 

Your mortgage loan originator sets these upfront fees, which include processing fees and underwriting fees. These are the costs of making the loan.

If you chose to buy down your interest rate by prepaying interest (also known as “Points”), it is here. 

 B. Services You Cannot Shop For: 

Your lender requires these services and determines providers. The requirements vary based on the type of loan. Within this section are:

Appraisal fees: A professional appraiser prepares a report on the value of your home based on the structure, land, recent sales of comparable homes and market trends.

Credit report fees: The cost to obtain your credit report.

Flood certification: Fee to check national data base to see if your home is in a flood zone and requires flood insurance.

Tax service: A third party service sets up your property tax payments to be paid out of your escrow account and monitors your payments to ensure they are made on time and accurately.

Upfront mortgage insurance premiums and/or funding fees, if you have a FHA, VA or USDA loan

Private Mortgage Insurance (often required for loans without a 20%+ down payment) upfront mortgage premiums for Conventional Loans 

C. Services You Can Shop For: 

Your lender requires these services, but you select provider. Your lender will give you several options for each, you may select from them or choose your own. Here you will find:

Pest inspection fees (typically optional, unless VA loan or stipulated by contract): Cost to have home inspected for wood destroying organisms.

Survey fees: A survey is conducted to ensure there are no encroachments within the boundaries of your property.

Lender’s title insurance: Protects the lender’s financial interest against any future defects with the title or liens.

Settlement fees: Charged for your settlement company’s services, which include preparing the closing package, title work, and the actual closing. 

D. Other Costs:

Taxes and Government Fees: Your local government sets these they include recording fees and transfer taxes.

Realtor Administration Fee: Charged by the Realtor’s brokerage to prepare documents and other administrative services.

Owner’s Title Insurance (Optional): Like lender’s title insurance, but it protects your financial interest as the buyer.

Pre-paids: Homeowner’s Insurance Premium, Prepaid Interest, and Property Taxes.

Initial Escrow Payment: You will also pay into your escrow account at closing. Funds from this account will pay your homeowner’s insurance, mortgage insurance and property taxes in the future.

If you are ready to purchase or have further questions, The Jeff Stempler Team is here for you. Please click here, to start a conversation about your home ownership goals and dreams.

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Call the Jeff Stempler Team, if the first time home buyer program you wanted is no longer available. We can help connect you with the right mortgage program for you in Maryland, DC or Virginia!

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How Much House Do I Qualify For?

Most buyers think “How much house do I qualify for?”  is the most important question when buying a home. Here at The Jeff Stempler team, we believe this is one of the least important questions.  To determine this number, we gather from you the following numbers and plug them into a computer:

1.     Gross monthly income

2.     Debt and monthly expenses

3.     Credit score

4.     Down payment amount

It spits out a number that you qualify for. But that number doesn’t know anything about your lifestyle. It does not know if you are paying for preschool, love to travel, or are assisting your aging parents with their expenses. Computers don’t care if you are saving aggressively to retire early or pay for your kid’s medical school. They aren’t listening to you and your goals and lifestyle.

This is why “How much house do I qualify for?” is NOT an important question. These are the two most important questions when buying a home:

1.     How much do I feel comfortable paying monthly?

2.     How much cash do I want to put into the transaction?

These numbers are much more real– they are determined by your lifestyle and preferences, not a computer! With these numbers, your comfort is the driving factor in determining the financial structure of your loan. We can determine what how much home you can comfortably afford, instead of a computer telling you how much house you can qualify for on paper.

Isn’t that so much more important? We want you to buy with confidence, not fear.

Are you ready to buy? Let’s start with a conversation. I want to get to know you, so I can help you achieve your goal of home ownership.

Read what others say about us:

“Jeff and his team went above and beyond from start to finish. They were responsive, accommodating, and a pleasure to work with. They made a stressful process of home buying feel like a breeze!” -DT, Washington, DC

“Working was Jeff Stempler was amazing and ridiculously easy! We were very nervous going into the mortgage process due to getting into a mortgage previously with another lender that wasn’t right for us which eventually caused us to lose our house. Jeff walked us through each step of the entire mortgage process, explaining everything and was always eager to answer any questions we had. He was very conscious of making sure we were comfortable with each step before going forward. Him and his entire team communicated with us frequently and updated us regularly. Everyone was very friendly and patient with us. I would very definitely recommend Jeff Stempler and his team to my family, friends and anyone looking to buy a home!” – ATT, Poolesville, MD 

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Renovation Loan: Transform an Ugly House into your Dream Home

A renovation loan allows you to turn a not-so-perfect house into your dream home. This is a great solution, when you can’t find a home you love, in the neighborhood you want to be in. Many clients have a specific school they want their children to attend, but struggle to find a property that meets their needs there, due to the limited supply of houses for sale right now. A renovation loan allows them to get into that school and live in a home they love.

Just some of the possibilities with a Renovation loan:

·         Replace dingy carpets with hardwoods

·         Paint the interior and exterior a fresh, modern color

·         Add bedrooms to meet your family’s needs

·         Go green with eco friendly windows

·         Update the big systems: HVAC, electrical, & plumbing

·         Say good-bye to ugly countertops and hello to gorgeous granite

The Jeff Stempler Team is proud to be part of First Home Mortgage home of the the best 203(K) Renovation Lending team! How did we achieve this? We work hard and consistently do an excellent job for our buyers.

Don’t take our word for it, read what our past clients say about our service, whether it is for a first home, a refinance or a renovation loan!

“Jeff and his entire team were extremely impressive from start to finish. I’ve interacted with a number of lenders, and two things distinguished Jeff: his team’s responsiveness and how well they worked together. We all know what it’s like to email someone or call and not hear back, or hear back days later. Jeff’s team was always on the ball. If someone was out of the office, a colleague jumped in. It’s not always about having the answer immediately, it’s about letting you know they got the message and are working on it. Home buying is stressful enough without feeling like you’re in the dark.” –FB, Arlington, VA

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Buying a House-- Mortgage Rates are LOW

Thinking about buying a home, but you've been on the fence? Now is the time to talk to the Jeff Stempler Team about mortgage financing! Rates are LOW! There are so many EXCELLENT first time home buyer programs available in Maryland, DC and Virginia now! Lets talk! 

 www.JeffStemplerTeam.com 

 Jeff Stempler NMLS 171047 

 This is not a guarantee to extend consumer credit as defined by Section 1026.2 of Regulation Z.  Programs, interest rates, terms and fees are subject to change without notice.  All loans are subject to credit approval and property appraisal.  First Home Mortgage Corporation NMLS ID #71603 (www.nmlsconsumeraccess.org) Income restrictions, minimum credit scores, CDA program requirements and qualifications apply.

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Post Closing Scams

Unfortunately, after you close on your new home, scammers get your address from public records and start sending you SO MUCH JUNK. They have gotten very good about making it look legitimate. 

Here at the Jeff Stempler Team, you are our clients and friends for life. Please call us anytime you have questions. You are never a bother-- we want to help you!

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Montgomery County Homeownership Assistance Fund

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Do NOT Select a Mortgage Company without Asking these 3 Questions First!

A lender’s answers will tell you a lot about them and the way they do business. You need to select a different mortgage lender, if they don’t eagerly answer these questions for you.

The Jeff Stempler Team will happily answer these questions, and any more you have. I want to educate you, so that you come to the settlement table knowing you are making a smart financial decision. When you select a mortgage lender, you should expect a lot– you are trusting them with one of the largest purchases of your life. You deserve nothing but the absolute best throughout the entire process.

Read what other buyers say about The Jeff Stempler Team:

“Jeff Stempler and his team are top notch. They are knowledgeable, friendly, and responsive. They took the time to explain all of my options for financing my first home and ensured that I understood all of my options. They worked closely with my realtor and myself to ensure that we obtained all applicable documentation in a timely fashion. I am very pleased with the level of service that I received and with that said I highly recommend contacting Jeff and his team to assist you.” — RGD, Frederick, MD

“Jeff and his team are amazing. They worked with me through a complicated closing, and guided me every step of the way. They were able to walk me through the various options in detail. He and his team also were extremely efficient and patient throughout the whole process.” -U, Poolesville, MD

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Mortgage Credit Certificates

A Mortgage Credit Certificate allows you to claim 25% of the Mortgage Interest you pay each year as a Tax Credit (NOT deduction!). This can save you thousands over the life of your mortgage. Eligible Borrowers in Washington, DC, Maryland and Virginia can use this amazing program. 

Want to know how to apply for a Mortgage Credit Certificate? Contact the Jeff Stempler Team at First Home Mortgage. We want to help you!

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Student Loan Debt doesn’t have delay home ownership!

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3 Easy Ways to Get Your Mortgage Down Payment

We know that saving up for a mortgage down payment can be tough, here are 3 Easy Ways to do it. 

Ready to buy? Have questions? Let's talk: www.JeffStemplerTeam.com

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Credit Score Needed for a Mortgage

What credit score do I need to get a mortgage?

People ask us at The Jeff Stempler Team, “What credit score do I need to get a mortgage?,” more than nearly any other question. The common assumption is that there is one number a borrower’s credit score must be above to obtain a mortgage and to get a good rate. This week on Mortgage Mythbusting I want to explain the truth: there is no exact credit score required.

What determines my Credit Score?

First a little background, the Fair Isaac Corporation (FICO) collects your financial information from the three major credit bureaus. Their software analyzes your credit history and determines your FICO score (commonly known as your credit score). Your score can range from 300-850, the higher the score, the better. Five factors determine your score, to varying degrees shown in the chart below.

Payment history: The most important element in determining your score is if you paid your past credit accounts on time.

Amounts owed: Owing high amounts does not lower your score. The percentage of the credit you are using that you have available matters the most. Creditors assume the closer you are to your credit limit, the more likely you are to miss a payment.

Length of credit history: A longer credit history is generally better. Also, how long your accounts have been open and how long since you last used them.

The credit mix in you use: Creditors consider a mix of credit best– installment (loans such as car, student, etc) and revolving (credit cards).

New credit:  Opening several new accounts in a short period of time will lower your score.

Additional Factors 

Your credit score is not the sole determiner of your eligibility for a mortgage and interest rate. As I discussed here, your down payment is also a component. A higher down payment (20%+ of purchase price) may offset a lower credit score.

The mortgage loan program you apply for is also a factor. FHA and VA loans generally have lower required credit scores than conventional loans. 

The Bottom Line on Credit Scores

Reach out to us at The Jeff Stempler Team to learn how your credit score will influence your mortgage loan eligibility and rate. I welcome the opportunity to discuss with you your specific financial goals and help you pursue your dream of home ownership. Please contact my team to get started.

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Jumbo Loans: Jeff Stempler is your experienced Jumbo Mortgage Lender

Jumbo Loans are in greater demand, due to increasing home values.

The Jeff Stempler Team proudly offers Jumbo Loans to meet your growing needs. Put your trust in a proven, experienced loan orginator when making one of the largest purchases of your life. My team’s expertise enables us to make the mortgage process fast, easy, and understandable, whether you are buying your first home or need a jumbo loan to move up to a larger home. In addition, our flexibility allows a customized and unique approach to home lending. Because every buyer’s situation is different, we will listen to your needs and present you with your best options. We want you to buy with confidence, knowing you made a smart decision for your financial future.

Key Highlights of Our Jumbo Loans:

Some programs allow up to 90% loan-to- value

Minimum credit score 700 on some programs

Purchase or Refinance

15 and 30 year fixed conventional loans, along with various ARM options

Specific highlights will vary by product

Ready to get your Jumbo Loan started?

Go to MarylandJumboHomeMortgage.com to start your application. I look forward to working you as you buy the home of your dreams. If you prefer, you can call me at 301-674-3975 to set up an appointment at our conveniently located office in Rockville.

Learn what past clients say about us:

“Jeff is a true professional, clear, upfront, detailed, and knowledgeable. He insists on your satisfaction before moving forward. He has a strong team behind him and they too are very efficient and thorough.” RD, Poolesville, MD

“Jeff and his staff were great and they provide a great loan process experience for me and my wife. We could have not pick a better person and company to have worked with. I would truly recommend Jeff and his team for their outstanding help and professionalism in getting us though the home buying process. Thanks again Jeff!” SM, Laurel, MD

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Are you currently "working from home" and taking business calls in your car or closet? Let's talk about moving into a bigger home this year. Or really upgrading and moving up into a jumbo mortgage. The Jeff Stempler Team has your back! 301-674-3975 www.JeffStemplerTeam.com

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Mortgage Documents

What documents do we need from you to obtain home financing? Your 3rd grade report card? Your cat's DNA profile? A copy of that speeding ticket you got when you were 16? Nope, those are all just mortgage myths. Learn the real truth of what we need here!

Here are the documents The Jeff Stempler Team actually recommends:

Driver’s License or Government Issued Photo ID

Social Security Card, if available

Pay Stubs covering most recent 30 day period

W-2 and/or 1099 forms from the previous two years

Most recent 2 years of federal tax returns with all coinciding schedules

Bank, investment, and retirement account statements (all pages) for previous two months or most recent quarterly statement

Of course, if you own other properties or are self-employed we will need additional documents. But I sincerely promise to never ask for your cat’s DNA. 

Ready to get started? Let’s talk!

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It Takes a Long Time to Get a Mortgage

Time to bust another Mortgage Myth! It doesn’t have to take a long time to close on a mortgage. 

It happened: You found the house of your dreams. Thoughts of ripping out the ugly wallpaper and planning summer BBQs in the backyard fill your head. You dream of nice little weekends….

Then suddenly reality: you need to actually pay for this dream house. That means a mortgage. Uh, oh. This information was not covered in high school. This is an ��Adult 101” pop quiz and you are not prepared.

How long does it take to get a mortgage?

Like many questions in life, this one does not have a single, easy answer.

There are many variables that determine how long it takes to get a mortgage.

These include:

The amount of time it takes you to submit your paperwork (the faster, the better!)

The time underwriting needs to review your file (things such as self-employment or owning rental properties can add time)

How long it takes your employer to verify your employment and income

The completion of any required repairs

The speed at which an appraiser can schedule, perform and submit appraisal

As you can see from the above list, “push button, get mortgage” doesn’t exist in reality! So how can you speed up the process?

1.       Submit all documentation requested by your lender as quickly as possible. Yes, you need to send it all in, not just parts of it! And yes, we know it is annoying and can feel overwhelming, but in this day and age it is required.

2.      Respond to any questions your lender or realtor asks as fast as you are able.

Your mortgage should be done the RIGHT way, not the RUSHED way. After all, this is one of the biggest purchases of your life! Here at the Jeff Stempler team, we believe in working quickly, but never in cutting corners. We can complete mortgages in as little as 15 days, while others take longer. On average, it takes about a month. We never waste time. Deadlines are a big deal to us– we never want to miss one– so we don’t make promises we can’t keep.

With your cooperation, we can get you home sweet home sooner, rather than later. And you’ll have room for so many activities.

Ready to start your mortgage? Click here to begin your application.

Read what others are saying about us:

“Jeff was highly recommended by a friend. He was professional, courteous and gave me the best refi rate. His entire team was super nice and got to closing very quickly. ” – KB, Owing Mills, MD

“Jeff Stempler and his team supported me through my first home purchase and made what I thought would be an extremely challenging process painless and easy. He discussed options, kept me on top of the paperwork, and got me a great rate and a quick closing.” – B, Washington, DC