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payment, the first year’s premium is usually due at closing, and is typically
a minimum of $600.
‹ Property tax escrow: Usually one quarter’s taxes.

‹ Bank fee: This covers loan origination and processing, and is typically
between $1000-$1500.
‹ Pre-construction loans: If you are buying pre-construction, there may be
many upgrades you will want to make that aren’t covered by the contract,
such as exterior lighting, an additional bathroom, or plumbing for a Pesach
kitchen. Payment for these will not be included in the mortgage, so you
will need a cash buffer to cover them.

Aside from the actual closing costs, you will have other expenses, such as
moving, painting, renovations, furnishings or mezuzos. Also, don’t forget
that once you own a home, you will be responsible for any appliances that
break, exterminator fees, and other assorted maintenance costs. Make sure
to leave yourself some room for additional expenses.

15 year vs 30 mortgage

While mortgages are typically paid out over 30 years, you may want to
consider the option of a 15 year mortgage. While monthly payments for a 15
year mortgage are obviously higher, in the long run the total amount you will
pay for your home will be significantly lower.
For example, a $600,000 home with a 30 year mortgage will have monthly
payments of $2,837. The total payments over the course of the loan will
be $1,021,280. A 15 year mortgage for the same home will have a monthly
payment of $4,414, with a total outlay of $794,540 over the life of the loan -
for a savings of $226,740.

Consider Co-Borrowing

Enlisting the help of a co-signer or co-borrower allows you to rely on his or
her income in addition to your own in order to qualify for a larger loan. A co-
borrower is featured on the title, while a co-signer merely takes responsibility
in case of default.
A co-signer needs to understand that he is not simply guaranteeing payment
in case you default on the loan; he is actually applying for the loan along with
you. Therefore, be sure to verify that their income is eligible for co-signing; if
they have outstanding debt (their own mortgage, co-signatures on other loans,
credit card debt, etc.) their eligible income will be proportionally reduced, just

42 | 2020 Lakewood Home Buyer’s Guide