American Mortgage Resource, Inc.

Providing the Best Financial Resources for Boston and Massachusetts

Tag: closing cost

Difference between Down Payments and Closing Costs

When it comes to buying a home, it’s important to be prepared for all the costs that may come up and making sure that you are able to afford it. Most future homeowners tend to focus on acquiring enough money to cover the down payment but are then taken back by the closing costs that they need to cover at the end. It’s critical to be aware of how much money you’ll need to fully close the deal on your new future home. In this month’s blog, we will discuss the difference between down payments and closing costs to help better prepare you for the home buying process.

Down Payments

A down payment is the portion of the money you must pay upfront when you begin the process of purchasing a home. It is the minimum amount that you need to put towards the total cost, while the remaining amount is funded by your mortgage loan. This is basically your first investment into your future home and the price may vary depending on what type of loan you have. Another important thing to remember is that your down payment will be due at closing, which is the final step for buyers when the sale is finalized.

Closing Costs

Closing costs occur when the title of the property is transferred to the buyer and the total amount will depend based on the location of the property and its value. The amounts associated with your closing costs consist of an assortment of taxes and fees from entities and services handling your loan. All of your closing cost fees will be listed on your loan estimate. These costs are completely separate from your down payment and are paid at closing. They can also be paid on the same check as your down payment.

Closing costs can be incurred by both the seller and the buyer and the fees can be split depending on the negotiation and contract. A mortgage lender can help decrease these costs by negotiating the sales contract.

Conclusion

Overall, the process of buying a house as a first time homeowner can be tedious and stressful. There are many fees associated with it and the terms can be confusing. That’s why at American Mortgage Resource, Inc., we dedicate ourselves to helping homeowners while providing worry-free solutions that best fits their needs. To consult with an expert, please contact us at (617) 972-8588 or visit our website for more information about our services.  

Tips for First Time Home Buyers

Being a first time home buyer has never been more confusing and convenient at the same time.  The most crucial aspect to home buying, for first time buyers especially, is adequate and thorough preparation. In this month’s blog we discuss a few ways first time home buyers can qualify and get approved for an affordable mortgage at a great, low rate.

Strengthen Your Credit Score

Typically, establishing and strengthening a credit score can take years of effort, however there are several steps you can take to give it an impressively quick boost. You can finesse your credit score today by disputing any damaging errors in your report, keeping credit debts at or below 30% of their limits, making all payments on time, and for some opening a new line of credit can help too. Keep in mind that in addition to analyzing you and your partner’s credit scores, lenders will also consider your income-to-debt obligation ratio.

Save, Save, Save!

The best tip for first time home buyers is to save as much cash for a down payment as possible. The higher the amount put forth the better chances a first time home buyer will get approved with a competitive rate. Plus, the cost of the down payment isn’t the only expense to consider saving for, as there are often significant closing costs and move in expenses involved with home buying as well.

Explore Mortgage Options

In recent years more and more programs have become available to make home buying attainable for more first time buyers. These programs will often allow new buyers to qualify for mortgages with down payments as low as 3% down. First time buyers should be aware that some mortgage brokers will only accept these types of loans when private mortgage insurance (PMI) is also acquired. 

Final Thoughts

American Mortgage Resource is a home mortgage broker that specializes in home loans for first-time buyers, with very competitively low mortgage rates in Waltham, MA, the Boston area, and the entire state of Massachusetts. Despite your individual circumstances we will help you qualify, apply, and be approved for the right mortgage loan for you. Contact our team today for more information by visiting our website or calling us at (617) 972-8588.

Five Mortgage Terms to Know

Are you in the process of buying a new home? When you’re talking to real estate agents and lenders, they are probably using terms in conversation that you have never heard before. You may hear terms such as “closing costs” and “escrow”, which is why it’s important to know some basic mortgage vocabulary so you don’t have to ask too many questions. In addition, purchasing a home is a big commitment, so you want to understand exactly what’s going on. In this blog, we discuss five mortgage terms you should know!

AMORTIZATION

When you are making equal payments towards the principal and interest, this is called amortization. You are essentially paying towards the interest in the beginning of your payments, but as the loan gets smaller, less interest is charged. It’s a gradual reduction of paying your debt over time.

CLOSING COSTS 

The money you need to close the mortgage deal is called closing costs. These costs include everything from title insurance and escrow fees to lender charges and transfer taxes. FYI: All closing costs will be listed on the loan estimate that the mortgage lender gives you within three business days of your application.

EQUITY

Equity is the difference between what you owe on your home and the current market value. As you pay your mortgage, the equity grows. You can tap into this value over time. For example, you can apply for a home equity loan, a home equity line of credit or a reverse mortgage.

ESCROW

Escrow is a legal arrangement in which a third party temporarily holds large sums money or property until a particular condition has been met.” In real estate, escrow is used to protect the buyer’s deposit so the money goes to the right party according to the conditions of the sale. It also holds a homeowner’s funds for taxes and insurance.

TITLE INSURANCE

Title insurance guards against any disputes about the title, such as contractor liens or tax. It is a way for lenders and owners to protect themselves from financial loss and other related legal expenses.

Conclusion

At American Mortgage Resource, Inc., we are here to guide you through important financial decisions when it comes to buying a home. Let us help you with the home mortgage process and contact our team of professionals. Call us at 1-617-972-8588 or send us a message online!