Archive for May, 2014


Broomfield Real Estate Home Loans Information and Basics

In addition to the down payment that you will have to pay as a home buyer in Broomfield Colorado, there are miscellaneous fees charged by those involved with the purchase of your home sale. This is commonly referred to as “closing costs,” and this can get a little involved, so here is a short rundown on what is involved. Every lender must supply you with an estimate 3 business days after you request it in the form of a preliminary closing document. If they will not provide you with this document, then move on to another mortgage lender or bank. This is a requirement by law. Called a Good Faith Estimate, or GFE for short, this breakdown of loan costs gives you a comparable of services and charges that can be compared to other mortgage lenders and banking institutes so that you can get the most ideal loan for your situation.

Items such as your mortgage lender’s fee for processing, the origination fee, and any points to buydown your interest rate are items that are part of the closing costs that have to be paid to obtain the loan. This is one thing that needs to be analyzed closely when comparing lenders for your prospective home loan. Some lenders will offer lower rates than their competitors, and this is accomplished by purchasing points. These are then added onto the loan closing costs. So even if the rate is lower, typically the closing costs are more.

Other charges include taxes and insurance that are paid in advance which are sometimes called “pre-paids.” All lenders have to collect an escrow account for taxes and insurance for your home in advance. This is 12 months in advance and also require a 2 month “cushion.” Another way that a lender will lower their estimated cost for your home loan is by not figuring the total amount that will be required for the escrow on their Good Faith Estimate (GFE). By only allowing for 2 or 3 months escrow for “prepaids,” then they can make the closing costs appear lower. All lenders must set up this escrow for a minimum of 6 months. Keep this in mind when you are comparing Good Faith Estimates. Some lenders will understate this cost, and obviously it would have to be adjusted for the full requirement at closing.

Other fees that are often charged can be for a land survey, a charge to local government offices for recording the deed on the property after closing, Homeowner Association fees, credit reports, and of course, the appraisal. Appraisals should always be part of your estimate, lenders do not pay for the appraisal, you as the buyer, pay for the appraisal, whether it is in the closing costs fees or you pay for the appraisal separately.

Broomfield Homes and Real Estate

Broomfield Homes and Real Estate

If you have any questions about home loans in the Broomfield real estate market, or you have other questions about buying a home in the Broomfield area or any of the real estate listings in Westminster, Thornton, Brighton, Arvada, or Lakewood, then please call us and we will be glad to help you in any way that we can. We are real estate professionals in Broomfield Westminster Thornton Brighton areas and we can offer top service in the real estate market all across the Denver Front Range.

Have a great day!

Shaun Werkele