One more detail involves the money you receive from family or friends. This kind of income should be cleared with the lender early in the process, in order for the sums to avoid being considered as further debt. Another way to delay the closure is by changing jobs or switching positions. These actions are highly questioned, especially if they lead to your main income no longer based on a monthly salary, but on commissions or performance bonuses. The unstable nature of a commission-based income might threaten the deal.
10 THINGS TO KNOW IF YOU'RE CLOSING A HOME DEAL FOR THE FIRS R THE FIRST TIME
#1. Open an Escrow
The first step to closing the deal and unlocking the front door of your own house is to open an escrow. An escrow is a contractual arrangement in which a third party receives and disburses money or documents for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties. Escrow, on average, will last approximately one month. During that time, the third party is taking care of transactions on both the seller and buyer’s behalf. For example, if you’re providing an inspection as a buyer, you deposit funds to the escrow account. Costs of this service are to be negotiated beforehand. Be conscious of the escrow company’s fees. Some contain unexpected fees you might only become aware of during payments because they’re hidden. Understand escrow company fees before entering into an agreement.
#2. Lock in the Interest Rate
The price for a mortgage loan is typically expressed as “points” paid to get a certain interest rate. Points are essentially prepaid
77
Powered by FlippingBook