Mortgages are expensive, to begin with. By the time you’re done with the process, though, the total costs could end up going up on your Terravita Scottsdale mortgage before the loan closes if you don’t plan correctly. Fees associated with a home loan can change for many reasons but here are the most common ones.
Taking Your Time
While you might think you have all of the time in the world when it comes to supplying your lender with bank statements, pay stubs, and other documentation needed for the mortgage application, it could work against you if you take too much time. Failure to do so within 24-48 hours could result in having to take a rate-lock extension which could drive up the total cost of your loan for your Terravita Scottsdale home.
An interest-rate lock is only good for a certain amount of time, usually 30 days. Basically, a rate lock locks in the rate you’ll pay over the life of your mortgage. But as the market changes, this rate lock to the end investor can go up or down.
External Factors
Your escrow for your Terravita Scottsdale home can also be delayed by external factors. Maybe the seller isn’t signing the required documentation in a fast manner or there could be home appraisal delays. While the delays might not be your fault, they still could end up costing you more money when extending your interest rate lock.
So, what can you do? Order an appraisal upfront when buying a home. Order it when you do your loan application.
The Appraisal Doesn’t Go as Planned
Real estate appraisers for your Terravita Scottsdale home have complete authority when it comes to the value of your property. While most mortgage companies set a standard appraisal fee, the appraiser can still change it and charge what they want, especially if they’re very busy. The appraiser might also decline the order, resulting in the lender having to find a new appraiser. You might have to pay the extra fee the appraiser is requesting if you’re on a tight closing deadline on your Terravita Scottsdale home.
Another delay you could face on your Terravita Scottsdale home is if your appraisal doesn’t come in at the desired value. That changes the loan-to-value ratio on your mortgage. As a result, you could face higher fees and/or rates.
The best way to reduce additional fees is to stay in constant touch with your lender. You can also generally lower the cost of your mortgage by improving your credit since a good credit score will help you qualify for the best interest rates.