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What to Bring to Closing

What to bring to closing

What happens between the loan objection deadline and closing?

There are parts of the transaction where you as the Buyer may feel like there is a lot of movement.  With me as your agent, you shouldn’t feel stressed during these times. I will get you ready for your real estate closing. Before we arrive at the title company to perform the closing, you will need to compile some additional documentation and get ready to sign a lot of documents (if you are securing the home purchase with a loan).

Here is an easy list of what you will need to have on hand for closing:

  • You will need to know your Social Security number (or Tax Identification Number) to complete IRS documents at the closing table. If you do not have it memorized, please bring additional paperwork.
  • You will need your driver’s license, a Colorado identification card, or passport. Whichever form you decide to bring make sure it is current (NOT expired).
    • If there has been a change of marital status, let the closer know before you get to the closing table. You will need to provide a marriage license or divorce decree.
  • As stated in an earlier blog,
  • You will need to know how you are transferring money to the Title Company (either wire transfer or cashier’s check). If you would like to wire the funds to the title company, please call me. I can help you avoid the scammers that are trying to steal your money.

Whether you are a first-time home Buyer or a seasoned Buyer being prepared for closing can lower your stress level.


What to Expect at a Closing

What to Expect at closing

Arriving at the title company to sign all the real estate documents to purchase your home can be stressful – this is one of the largest purchase you will ever make.  So I am here to tell you exactly what it will be like.

First, you will be greeted by your closer and the closer will show you to a conference room.  The closer will generally sit at the head of the table for ease of passing documents back and froth from the Buyer and Seller to sign.

The Seller and Sellers Broker will be on one side of the table and the other side will be the Buyer, Buyers Broker and at times Lender.  The closer will ask for your government issued identification and review the loan documents with the Buyer.  This process generally takes about 40 minutes.

If the Lender is requiring funding conditions, the closer may step out of the room to begin that process.  The closer will then review with the Buyer and Seller the Real Estate documents – such as the Buyers Settlement Statement, Sellers Settlement Statement, Warranty Deed, etc.  This process takes about 20 minutes.

The Closer will then accept “good funds” from the Buyer and Lender (cashier’s check or wire).   The Closer will then take the funds and distribute per the contract.

Only 2 more steps to go:  the closer will ask Buyer, Seller and Brokers how they would like to receive copies of the signed documents – email, hard copy or both.

And for the final step, Seller hands the keys to the Buyer.  It is that simple.  Congratulations you are officially a homeowner in Colorado.


How Much Do I Need for a Down Payment

How Much Do I Need for a Down Payment? The Answer May Surprise You

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One of the most common questions I get asked as a lender is How much do I need for a down payment?

The question comes from both first-time buyers and those who are purchasing their fourth home in the last 25 years. The reason it comes up so much is that there’s a lot of confusing information (or misinformation) on the topic floating around the web.

For example, check out this article: Millennials Need a Decade to Save for a Down Payment, Says Study.

A decade sounds daunting, maybe even impossible for many buyers. Articles like this one make home ownership sound like climbing Mount Everest. And they’re flat out wrong for a variety of reasons.

How Much Do I Need for a Down Payment

Saving for a down payment shouldn’t feel like climbing Mount Everest!

According to a recent study conducted by Harris Poll interviewing 2,000 Americans, 44% believe they need a 20% down payment to buy a home

That’s the number that comes up again and again: 20%. The reason that number has such staying power, is that 20% if where lenders stop charging PMI or private mortgage insurance.

Down payments less than that amount require the buyer to pay for an insurance policy on themselves against default on the mortgage. (PMI is a complicated topic that deserves its own blog post—I will cover it in detail in a future post).

However, 20% is far more than most buyers put down when purchasing a home

The average down payment is closer to 8% according to the National Association of Realtors. And 8% is far more than most lenders require, especially for first-time home buyers.

How Much Do I Need for a Down Payment

You don’t need a massive down payment to purchase a home.

Many people believe they should put down the largest possible down payment. However, sometimes you’re better off with a smaller down payment, especially for a first-time buyer.


How much do you really need for a down payment? The answer depends on what sort of loan you apply for. Most American’s end up with a loan from one of the 4 major players in home finance:

  • Fannie Mae
  • Freddie Mac
  • FHA
  • VA

All of these are government backed in one way or another. Fannie and Freddie are known as “GSEs” or Government Sponsored Entities. That means that when the lender you’re working with funds the loan, it is backed by a guarantee from Uncle Sam. FHA is similar, but run by HUD (Housing and Urban Development). VA falls into its own unique category, which we’ll get into in a bit.

If you apply for a “Conventional” loan, your loan will be underwritten and guaranteed by either Fannie Mae or Freddie Mac. They’re the major players, and underwrite and guarantee most loans in the United States.

Fannie Mae and Freddie Mac require a minimum 3% down payment for a first-time home buyer. You read that right.

 A 3% down payment will get you into a new home if you are a first-time buyer

You must be a first-time buyer to put down only 3%, but there’s an interesting caveat: Fannie and Freddie define “first-time” as someone who hasn’t owned a home in the last 3 years. If you owned a home 3+ years ago and are now buying again, you will qualify with a 3% down payment.

If you have good credit and are purchasing in Colorado, it gets even better: You can qualify for a mortgage with a 1% down payment!

New American Funding, the company I work for, has a unique program for first time buyers with good to excellent credit. We offer a 1% down payment program with a 2% grant (free money) that comes directly from us!

Sound too good to be true?

It’s not.

Here’s how the 1% down payment program works

We require the buyer to bring 1% of their own funds, and then back that up with a 2% grant which we pay to get the borrower to the 3% required by Freddie Mac. The money really is a grant, which means its free, no strings attached. For a buyer purchasing a $300,000 home, that’s $6,000 in free money.

The rates and terms on these loans are almost identical to those on a standard conventional loan. The rate is slightly higher, usually about .125% to .25% more than someone putting down 3% of their own money, but for a buyer with limited liquid assets, it can be the different between buying a home now or waiting several more years.

The 1% down program is unique to New American Funding. We are the only lender in Colorado that offers it

So what if you’re not a first-time buyer? What is your minimum down payment?

The answer is 5%, unless you go with a FHA loan.

Freddie and Fannie require 5% for buyers who have owned a home in the last 3 years

FHA on the other hand, requires 3.5% regardless if you are a first-time buyer or are purchasing your 10th home. FHA also works with buyers who have less than stellar credit. For folks who have had a bankruptcy or foreclosure in the last few years, FHA is the way to go.

FHA has some downsides (one of which is higher PMI or private mortgage insurance rates), but they would require their own blog post to cover in detail.

Which brings us to VA

If you are currently serving in the armed forces or were honorably discharged, you will qualify for a VA loan that requires NO down payment. Veterans purchasing a new home can put down 0%. It’s the lowest requirement in all of lending, but only applies to service members and veterans.

The best answer to the question How Much Do I Need for a Down Payment? is It depends on your unique circumstances, goals, and objectives.

You need to talk to a professional who can help determine what you will qualify for based on your credit, income, and a comprehensive understanding of your finances. Your needs are unique, and working with a knowledgeable lender who can talk you through every aspect of your transaction.

I’ve worked as a mortgage lender for almost fifteen years and have helped hundreds of clients buy homes in seven different states. I can help you determine what you’ll need, and find the right program that gets you into your dream home for the lowest possible cost and with the lowest possible rate.

You can read what my past clients have to say about me by clicking here. New American Funding has 26,000+ reviews with an average 4.9/5.0 rating.

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