If you’re purchasing your own home for the first time, the logistics of getting a mortgage might still be a mystery to you. Thankfully, the experts at Leeds Building Society have released a mortgage guide to help first-time buyers, listing each process in a timeline for you to refer to. Still not sure where to start? Read on for a further explanation of getting your first mortgage.
Buying your New Home
The mortgage-buying process begins as soon as you start looking for a new property. You need to obtain what’s called a Decision in Principle, which is a statement from a mortgage company detailing how much it is willing to lend you. This then shows potential sellers that you are a serious buyer and that somebody has already offered to lend you the money in principle. You can then start looking around properties and making offers.
When your application has been finalized, your mortgage provider will organize for the new property to be valued and surveyed, so that a suitable mortgage amount can be agreed upon.
It’s best to hire a legal representative such as a solicitor to deal with negotiations, as you may find that problems with a property or even your credit history can cause delays, which are easily solved when you have a legal expert on hand. Once all paperwork is completed between your solicitor and the mortgage provider, you will receive a mortgage offer outlining all of the conditions and terms of the contract.
You’re not obliged to accept a mortgage offer, but as long as everything is acceptable in the contract sent to you, these can now be signed and confirmed. Your deposit must be paid at the same time you exchange contracts, and this completes the mortgage-buying process!
Do make sure you have a legal expert on-hand, as purchasing a mortgage is a huge financial commitment and should be carried out with the utmost care. Make sure before you confirm any offer that the monthly payments are reasonable and that you’re happy with the overall cost – it might be worth asking your solicitor to confirm for you whether they believe it to be a reasonable offer compared to other properties in the area. With all of this settled, you’ll finally be free to enjoy your new home simply!
Understanding Mortgage Title Fees
If you are buying a home for the first time, be prepared for a complicated process. All of that paperwork and fine print may seem like it is there just to trip you up and line the pockets of lawyers, but it is there to protect all involved parties.
It is a necessary evil within real estate, as are title fees on your mortgage. These fees are the closing costs both sides must swallow. Some of them come thanks to the lender who is supplying the mortgage to the buyer. But most of them come from another entity, the title company.
It is their job to maintain all of the property information that could be financially or legally important, such as liens, property boundaries, and any other references. And they charge for handling those issues. Here is a quick description to help you understand mortgage title fees.
The first fee
The first fee is the title policy, which the title company issues on behalf of the property owner. This is an insurance policy, so if there are any liens on the property because of past-due taxes, bills or contractor disputes neither the buyer nor the seller will be held responsible.
MORTGAGES EXPLAINED 🏘
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The seller has to pay this fee, and it usually ends up at 1% of the property’s sale price. Once in hand, the seller can rest easy with the knowledge that he cannot be sued by the buyer because of some undisclosed issue. Any company that provides a mortgage is going to require this policy to be in place before finalizing the agreement.
Another mortgage title fee covers the property appraisal. The appraisal is a process of determining the real value of the property, and it is another requirement by the mortgage provider. Once the appraisal is completed, the results are handed to the title company, which will then mediate any disputes if the seller doesn’t agree with the appraisal.
The title company will provide all parties with copies of the appraisal findings and ensure it was conducted by the proper authorities. In conjunction with the appraisal, most title fees include the cost of a property survey. This is a map created that lays out the outlines of the property, as well as topography information and specific border measurements.
The title company will require the survey map (or plot plan, as it is also known) before the title can be transferred to the buyer. The fee for a survey will depend on the size of the property, and the complexity of the required mapping process.
Once all parties have approved the purchase, the deed of sale has to be recorded. The paperwork is filed with the county clerk, and a recording fee is charged. The buyer will pay his share so that the name on the deed is transferred, and the seller will pay for the whole transfer process. This is another fee the title company will handle during the closing process. It’s called the title recording fee, and while necessary, it will be one of the lesser of the fees you will have to deal with.
Even after the title policy is filed, the title company will still have to acknowledge that the seller has covered all property taxes up to the date of the sale. And the buyer must receive a statement detailing if he is taking on any taxes for a partial year of ownership.
This takes a good deal of research, and the title company will certainly charge you to take care of it. You’ll also be responsible for paying the notary, who verifies all of the documents filed with the county court. Again, this won’t be as significant as the title insurance fee, but there’s no way around it.
Instead of worrying over these closing costs, understand that they are covering both parties and helping to make sure that the contract is real and binding. After all the work that goes into buying or selling a home, that can be quite comforting.