Locking in Interest Rates
Before contacting a real estate agent, reviewing the classifieds and looking at houses, you need to know how much house you can afford. This is determined by how much cash you have saved, together with the size of the mortgage you will qualify for and can afford to repay each month. So the first thing to do would be to begin to compare mortgage rates and terms, and to talk to a mortgage lender.
In order to understand the answer, let’s first define “locking in”. A lock-in is an agreement between you as the borrower, and the lender, to fix the rate of your mortgage (or co-op loan), at a particular rate, for a particular period of time (30, 60 days, for example), and sometimes for a fee. If you’re not a gambler, and the current day’s rate is attractive and affordable to you, the lock-in is very tempting, and probably a good idea, however, timing is everything. A lock-in will have a definite term, and then it will expire. The closing must occur before the lock-in expires.
Home buyers frequently ask whether they really need to have the house they’ve chosen to buy inspected by an engineer or home inspector. In most instances, the answer is “yes”. For the most part, a buyer agrees to accept the home in “as is” condition. Therefore, a buyer would be well advised to know what that condition is.
Certificates of Occupancy
In all residential premises (except individual co-operative apartments), require a Certificate of Occupancy (referred to herein as a c/o). A c/o is issued by the local building department and literally certifies that the premises are fit to be occupied. A c/o is issued when a house (or condominium) is built, and has passed a final inspection by the building department. You cannot legally occupy a house if a c/o is not in place.
Although most of us have heard the phrase “closing costs”, not many people really understand what’s adding $10,000 to $12,000 (and more) to the cost of purchasing a home. Even those of you who have spoken with a mortgage lender, and received a “Good Faith Estimate” of closing costs, do not fully understand where all that money is going. Let’s look more closely at what you’re actually paying for and why. The following applies to houses and condos. Co ops (which are not real estate) will be the subject of another article.
Who's Who at a Closing
It takes more than just the buyer and the seller to conduct a closing. When you enter the room and see a table full of people you don’t recognize, don’t panic. Here’s who’s who: