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What Loan-Related Fees Should You Expect at Closing?

When you purchase a home, you will have to pay the associated closing costs. These costs can be incredibly confusing and are related to a variety of different things. Property taxes, appraisal fees, and more can be incorporated into the closing costs you are expected to pay. Below are all of the loan-related fees that will potentially be included at the time of closing.

The application fee: This is the cost of the application for the loan, which includes credit checks and various administrative expenses. This fee will vary based on the lender you choose and the work involved with processing the application.

The assumption fee: If you are taking over the remaining balance of the seller’s mortgage, you may be charged an additional fee based on that amount.

The attorney fees: If you have a real estate attorney in St. Johns County working with you, the fees may be included in the closing costs.

The prepaid interest fee: Many lenders will require the buyer to pay the interest on the mortgage that accrues during the date of settlement and the first monthly payment. This fee will vary based on the size of your loan.

The loan origination fee: Also known as an underwriting fee, administrative fee, or processing fee, this amount is charged by the lender for evaluating and preparing the loan.

The mortgage broker fee: If you are working with a mortgage broker, their fee will be incorporated into the closing costs. This tends to be 1-2% of the home’s price.

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How to Budget for Closing Costs, Part 2

Closing costs can be unexpectedly expensive, but fortunately, there are ways to budget and save on them. Instead of paying more than you have to on the home of your dreams, the following tips can help you save extra on this expensive part of the buying process.

Plan Your Closing Time

One part of your closing costs consists of interest for the time between your closing date and the end of the current month. To reduce your out of pocket costs, opt for a closing date closer to the end of the month to minimize this prepaid interest.

Sign in Person

You may be able to reduce your closing costs by asking your escrow company. Contact them at the very beginning of the process to discuss all of the fees you will be charged. Then agree to use any electronic documents and sign in-person to potentially avoid fees for printing and mailing.

If you are concerned about the closing costs associated with your home purchase, contact our real estate attorney in St. Johns County. At Baron Bartlett, P.A., we have been assisting those with all of their real estate law needs since 1980. We can handle a variety of transactions and cases, so call our team today at (904) 285-9993 to schedule a consultation.

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What is the Difference between a Net Lease and a Gross Lease?

When a commercial property is sold, the interest is sold for a single price. When it comes to commercial leases, there are different approaches involved for payment. The most common leases are a net lease and a gross lease, each with their own set of differences and advantages.

What is a Gross Lease?

This type of lease is the most tenant-friendly, as the rent is all-inclusive. Many of the expenses that come with living in the property, such as utilities and handyman services, are covered in the lease. Though the landlord can negotiate various aspects of these leases, the purpose is to primarily benefit the tenant without placing too much strain on the property owner.

What is a Net Lease?

A net lease tends to be more landlord-friendly, as it requires the tenant to pay not only rent, but also any taxes, insurance, and maintenance associated with the property. Though the payments can fluctuate based on the level of maintenance or utilities used, the tenant may find that they are paying less overall than they would with a gross lease due to these fluctuations.

If you are interested in leasing a commercial property but are unsure as to which type of lease is best for you, contact our real estate attorney in St. Johns County. Our experienced team at Baron Bartlett, P.A. will help you navigate all confusing aspects of your latest transaction.