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November 2010 Newsletter

LOOKING FOR A GOOD DEAL ON CLOSING COSTS?

Although you can get a great deal on mortgage rates for Sedona Real Estate today, you can easily end up paying too much on closing costs. The expenses of appraisals, title insurance, credit checks and other fees can easily add up to thousands of dollars. However, you can reduce those costs by getting multiple quotes and negotiating.

With 30 year loan rates hovering around 4.30% and 15 year rates close to 3.80% nationally, now is a great time to finance or buy a home. Shopping multiple sources will definitely pay off. With closing costs averaging $3,741 on a $200,000 loan, you can keep a lot more money in your pocket while, at the same time, getting some of the best rates in a generation.

Not only are closing costs numerous, they can also get onerous. In addition to making money on the loan itself, many lenders slap on "junk fees" like processing or underwriting. You can avoid these fees either by negotiating them away or going to another lender. The best financing strategy involves first detailing the fees and your total cost.

It is not unusual for buyers (and refinancers) to pay from 3 percent to 5 percent of the total cost of the home in closing costs. The total expenses are largely a factor of where you live. Large metropolitan areas are naturally the most expensive; small towns and rural areas are the least.

One way to help you reduce your costs is to consider internet services, local banks and credit unions. You may be able to apply online for basic quotes. Just make sure you get a good faith estimate of all the costs involved. You may need to make some phone calls to get closing estimates.

It is important to compare all fees. Some lenders charge underwriting and processing fees while others don't. If you find a lender offering a desirable rate, and the fees are high relative to other lenders, ask him/her to trim the closing costs. Do this before you sign up for a credit check.

Title insurance is costly, but it is required. It can range from $150 to a $1,000, sometimes more. Some states regulate the price. A good mortgage broker should be able to get you the best price.

Don't forget to read your HUD-1 statement carefully. This is the form that lists all closing costs before you actually close and is available to you at least one day before closing. Remember, you can walk away if previously undisclosed fees were added.

Although there have been several efforts made to streamline the closing process, it still can be confusing. You will have to review a mountain of forms. Fully understand what you are signing.

Got any perplexing concerns? Give me a call and I will help you through the maze. I also have access to excellent lenders. There should be no reason for you to postpone purchasing a home in beautiful Sedona just because you might forget to dot an "i" or cross a "t".

Would you like to discuss what Sedona real estate area might be correct for you? You can E-mail me at lee@leecongdon.com or call me at 928-300-5050.

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