transactions on both the seller and buyer’s behalf. For example, if you are 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, since some charge unexpected fees you might only become aware of during payment if you didn’t do your research beforehand. Understand your escrow company’s fees before entering into an agreement.
#2. Lock In the Interest Rate
According to Bank of America, mortgage loan price is typically expressed as “points” paid to earn a certain interest rate. Points are essentially prepaid interest, so the more points paid, the lower the interest rate. One point equals one percent of the loan amount. A mortgage rate lock guarantees that a mortgage lender will give a buyer a certain interest rate, at a certain price, for a certain period of time. A rate lock protects the borrower from rising interest rates in the period between sales agreement execution and closing (often a month). If the buyer locks in a rate of 3.25%, she will only have to pay 3.25% interest even if rates rise while going through the loan application process. A rate lock is commonly good for 30, 45, or 60 days, though that time period can be shorter or longer. Once that period expires, the buyer is no longer guaranteed the locked- in rate unless the lender agrees to extend it. This is why arranging a prompt closing is crucial.
#3. Have a Home Inspection
Making absolutely certain that roofing shingles do not fall off on the first day in your new home and that the furnace does not refuse to operate whenever the temperature goes below 45
80
Powered by FlippingBook