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You may enter any combination of variables. Remember that TAXES and INSURANCES are not computed in this formula.

 

HOW MUCH CAN I AFFORD?

With this crazy market, what can I afford now? Here's a really helpful guide for you to consider prior to purchasing. Let's start with the basics. If you missed it, please make sure you read my Home Buying Guide as well. It's located on this page by clicking here.

WHAT DO YOU DO NOW? WHERE DO YOU BEGIN?

This information is based on the typical costs associated with BUYING a home in the Birmingham Alabama area. Other areas of the country and state have different standards and customs, so this applies to our area only. Buyer's typically pay for the mortgage costs, 1/2 attorney fees, 1/2 title fees, recording fees, and so forth.

NOTE:
There are BUYER closing costs and SELLER closing costs. Many people don't know the difference, so here's my guide for the Birmingham Alabama Real Estate area.
Who pays? Buyer or Seller? It's not that clear, but here's a rough guide.

PAID BY BUYER POSSIBLY

PAID BY SELLER POSSIBLY

  • 1/2 Title for Lender
  • 1/2 Title for Buyer
  • 1/2 Attorney Fee
  • Mortgage Fees
  • Survey
  • Inspections (Home, septic, roof, EIFS, etc...)
  • Home owner insurance Premiums
  • Pro-rated Taxes
  • Down Payment
  • Recording Fees
  • 1/2 Title for Lender
  • 1/2 Title for Buyer
  • 1/2 Attorney Fee
  • Termite Contract
  • Realtor Commission
  • City verification letters
  • Pro-rated Home Owner Insurance Premiums
  • Pro-rated Home Owner Association fees.
  • Pro-rated Taxes
  • Current Loan payoff fees, wiring fees
  • Current Loan payoff
  • Other property Liens

EXAMPLES AND ESTIMATES ONLY!

SALES PRICE OF $100,000 BUYER COSTS, 3% Down SALES PRICE OF $100,000 SELLER COSTS
BUYER SIDE FEES  
Loan Amount $97,000.00
Origination Fee $970.00
Appraisal Fee $450.00
Credit Report $25.00
Underwriting Fee $400.00
Flood Certification $50.00
Recording Fees to County $250.00
Inspection of Home $300.00
Inspection of Septic System (If needed) $250.00
1/2 Attorney Fee $300.00
1/2 Title Fees $280.00
Home Owner Insurance $450.00
Taxes (Varies greatly per county!) $500.00
Pre-Paid Interest to lower your rate? Varies
Interest Rate of Loan (Varies greatly) 6.75%
MONTHLY PITI PAYMENT $785.00
Total Needed to close is roughly: $6,100.00
**A Seller IS ALLOWED to contribute and actually pay up to 3% of a Buyer's Closing Costs and Pre-Paid items, but is not allowed to fund the 3% Down Payment under the new FHA guidelines as of 10/1/2008. There may be a special community program available for down payment assistance, but this has been a rarity in my experience for most buyers.
SELLER SIDE FEES  
1/2 Title Fees $280.00
1/2 Attorney Fees $300.00
Termite Contract $150.00
3% Selling Broker Commission $3,000.00
3% Listing Broker Commission $3,000.00
Pro-Rated Taxes: Varies on closing date... Varies
City verification letter that home has no lien $10.00
Home Warranty (Can be paid by Buyer) $500.00
Misc courrier fees, current loan payoff, etc... $100.00
Current Loan Payoff Varies
TOTAL ESTIMATED FUNDS AT CLOSING ABOUT: $92,200.00
Of course, if the Seller pays any of the Buyer's Closing Costs and Pre-Paid items, that amount would be added to the costs above. Sellers are generally allowed to pay up to 3% of the Buyer's Closing Costs, but not allowed to pay the Buyer's down payment under new FHA guidelines as of 10/1/2008.

NOTE:
This is an example, of course. And variables that can change greatly include the taxes in your area, the cost of your Hazard Insurance, a.k.a. Home Owner's Insurance Policy, current loan payoff for the Seller, and so forth. However, these numbers came right from a HUD1 for a property sold recently.

Here's my personal note to potential home buyers.

If you don't have any money for a down payment, save it. You will need it in this current market. Now is the time, if you have not done so already, to put a basic personal budget together for your long term financial stability.

No longer should home buyers purchase a property without reading the details of their mortgage program. If you don't know what the meaning of an ARM is, or Fixed Rate option, talk to a qualified MORTGAGE PROFESSIONAL! Our economy, and your future, is too important to go blindly into a transaction that may lead to a serious financial catastrophe.

Better yet, contact Melissa Morse with BBVA/Compass Bank. She will guide you down the right path HONESTLY, QUICKLY, AND WITH YOUR BEST INTEREST in mind. So, be honest on your Loan Application and you'll feel great about becoming a home owner.

Melissa Morse, BBVA/Compass Bank, 205-602-4769 (Cell)

Thank you for considering me for your real estate needs. My slogan is "Finding and Fitting the needs of my clients!"

Sincerely,

 

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