Financing a Deal
Unless purchasing a property all cash an alternative is financing. There are various options when financing property from traditional banks to private investors and hard money loans. Many opt to finance their home through an experienced mortgage lender who can help guide a home buyer through the steps of financing. Gama Group works with a list of experienced mortgage lenders that offer competitive rates, excellent customer service, product knowledge, and professional guidance.
Lenders offer several types of mortgages, but the most common are fixed-rate mortgages. These loans feature fixed rates and monthly payments, generally for 15-year and 30-year periods.
When purchasing a home you may encounter the following estimated mortgage associated fees:
Mortgage Associated Fees
Origination Costs – points 0 – 3% value of the loan
Application, Credit Check, etc. $500 + up
Appraisal $275 + up
Bank Attorney $500 + up
UCC-1 Filing $50 + up
Mortgage Recording Tax** Up to $500,000 is 1.8% of mortgage
Over $500,000 is 1.925% of mortgage
Title Insurance, Title Search & Recording Fees** Approximately 0.5% of the purchase price
Building Searches $200 – $400
Recording Charge $17 per document plus $5 per page
Real Estate Tax Escrow 2-6 months (verify with the bank)
Frequently asked questions:
What are interest rates on average?
The rate of interest charged on a mortgage. Mortgage rates are determined by the lender in most cases and can be either fixed (stay the same for the term of the mortgage) or variable (fluctuate with a benchmark interest rate). The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR).
What is an FHA loan?
FHA is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low to moderate-income borrowers who are unable to make a large down payment.
Should I apply for a loan prior to looking for a potential property or after I find one I’m interested in?
It is best to obtain a pre-approval indicating you are eligible for a loan. The pre-approval letter should be shown to your working real estate agent as proof you would obtain a loan. It will also help when you are ready to make an offer on a property. It is best to get a pre-approval and then start looking for the home.