Homebuyer money check list

Posted on Posted in Buyer Tips, First time home buyers

Michigan Home closing costs

I had a real estate deal blow up before the purchase agreement was even signed.  There was a mis communication between the mortgage lender and the buyer on what they needed for money.   It was neither persons fault.  They just didn’t understand the whole picture.  It was a $5000 difference.  So if you are a Michigan first time home buyer here are some things you need to know about how much you need for closing.

$1500 – $2500     Mortgage Closing Costs this does not include escrows, up front PMI, homeowners insurance, or tax prorations.  Your closing cost amount should come from your mortgage lender.

Varies according to taxes  Escrows    The bank requires you to set up an escrow account if you borrow more than 80% of the purchase price (if you put less than 20% down)  This amount can be given to you by your mortgage lender once they know what property you are buying and they know the property taxes.  YOU HAVE TO HAVE ESCROWS IF YOU DON’T PUT 20% DOWN!!!  Escrows are like a mandatory savings account so you have enough money in the account to pay your taxes and insurance each year when they come due.

Varies depending on what date you close. Tax Pro-rations   In Michigan you pay your property taxes ahead of time.  So when the seller sells the home he has paid taxes that he has not used.   That is what tax pro-rations are.  You are paying the seller back the unused portion of taxes they have paid.

Depends on your coverage    Home Owners insurance  You have to pay for one full year of homeowners insurance in full about 2 weeks before you close on the house.  It has to be paid in full

$250 – $450   Home Inspection  Every home buyer should have a home inspection done.  It will save you money in the long run.

                             

 

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