Tips

Who Pays Closing Costs?

They’re lots of misconceptions on this topic. It seems, sellers think buyers should pay for just about everything, and many buyers want sellers to pay all costs (thus reducing their required cash out of pocket). The truth is the answer as to “who pays?” is negotiable.

So, when it comes to closing costs, what exactly are we talking about? On the seller’s side are real estate commissions, legal fees, pro-rated real estate taxes, and owner’s title insurance. Sellers almost always pay the commissions; and pay the other items as well more often than not. On the buyer’s side are inspection fees, appraisal, loan fees, homeowners insurance, and escrow set-up costs. Buyers pay these almost always, unless they can negotiate to have the seller pay some or all of them. Generally speaking, sellers pay buyer’s closing costs most often on lower-priced homes and on deals where the buyer has a limited cash down payment (say, like 5% or less).

Sometimes the amount of buyer’s closing costs that seller can pay is limited by law. For example, VA loans only allow the seller to pay buyer’s costs up to 4% of the price. With FHA that number is 6% and with Conventional mortgages it is 3% if the buyer puts 10% or less down, and 6% otherwise. On contract transactions their is no limitation.

Like so many things in a real estate deal, who actually pays closing costs is negotiable. If you have questions about how to best structure a deal so it works for you in your specific situation… call, text or write. I work harder to make good things happen!

How to Manage Credit Cards

When it comes to how to increase your credit score, there is a lot of misinformation out there. But never fear! Here’s a well thought out post from Mike Wickham, who does a great job for people needing a mortgage to buy a new home…

“Avoid delinquent payments and maintain low utilization ratios.

Delinquent payments reduce your score. Eliminating the delinquency does not restore your score to where it was, it merely prevents a further decline. Delinquencies stay on your record for 7 years, although their force will gradually weaken as on-time payments come in.

Shoot for low utilization ratios, below 33% on all your cards. The utilization ratio is the outstanding debt relative to the maximum amount of debt that the credit grantor has set on that card. For example, if the balance on a card is $2,500 and the maximum balance is $5,000, the utilization rate is 50%.

A card holder can reduce his utilization ratio by reducing his balance, and also by increasing the maximum balance. If a borrower has had a good payment record, the maximum can often be increased simply by asking.

If your card issuer does not report a maximum, your score will be calculated on the assumption that the highest balance ever reached in that account is the maximum, when in fact it could be well below the maximum. This raises your utilization rate (and lowers your credit score) for no good reason.

If a card has no reported limit, you can either request that the limit be reported, or terminate the relationship. Alternatively, you can shift all your balances into this account temporarily so that the highest balance comes closer to the unreported maximum.

In addition, don’t have too many cards or too few, about 4 or 5 old cards that you actively use is about right. New cards can reduce your score. Avoid department store cards, which will reduce your score.”

Have a great week and stay warm!

Mike Wickham
Loan ConsultantNMLS: 505614

Caliber Home Loans, Inc.
10022 Lantern Road Suite 600

Fishers, IN 46037

Mobile: 317-260-1563 |Office: 317-576-4115

EFax: 877-673-0432

E-Mail: mike.wickham@caliberhomeloans.com

Apply On-Line @ http://caliberhomeloans.com/mwickham

It Never Hurts to Ask!

I just got off the telephone with a couple that I’ve been helping to find THE house. We got to talkin’ and it came out they’ve had their eye on this one house for a long time but have never mentioned it cuz’ they were afraid it would cost too much. That might be the case, then again it might not. But as long as they continued to look but not ask, one thing’s for certain- they’ll never know which it might be… too much or just right?!

So, bottom line…

IT NEVER HURTS TO ASK!

Heck, that’s why I’m here. In case you didn’t realize it, I work for you! So, listen up, cuz’ here’s how I go about helping you find THE house.

#1 I listen to what you would like in a perfect world.

#2 Next, I figure out what you’ve got to work with- the good, the bad, and even the ugly.

#3 Then I figure out how to deliver what you want, or at least as close as is humanly possible. (Now, to be sure, I don’t have a magic wand, but my previous clients will tell you that I work harder to make great things happen for you.)

So, if you see a house you really like but are afraid the down payment will be too much or that the monthly payments will be out of your budget- call me direct at 317-625-0655. Let’s talk. Maybe between the two of us we can figure out how to make this happen for you. There’s no cost for that effort, and no hassle either. And if we do figure something’ out— well, you just might get the home you’ve been dreaming about!

‘Nuff said. Talk with you soon, Bob