Page 24 - AZ Home Guide

WHAT TO AVOID DURING THE UNDERSTANDING

LOAN PROCESS APPRAISALS

Lenders require an appraisal to ensure that the
DO NOT PAY OFF EXISTING property is valued accurately to protect their
DO NOT CHANGE JOBS. ACCOUNTS UNLESS THE investment. A licensed or certified appraiser will
LENDER REQUESTS IT. assess the size and condition of the property
along with additional upgrades, features, etc…
and then compare them to similar houses (aka
“comparables”) in the area to determine what the
AVOID SWITCHING BANKS OR DO NOT MAKE ANY property is worth. Sometimes the appraisal report is
MOVING YOUR MONEY TO LARGE PURCHASES. used to renegotiate the sales price. The Buyer can
ANOTHER INSTITUTION. expect to pay for the appraisal either before or at
closing depending on the lender’s requirements.
BUYING MINI GLOSSARY OF LOAN CLOSING COSTS

APPRAISAL FEE: A one-time fee to pay an independent appraiser MISCELLANEOUS TITLE CHARGES: The title company may charge
to determine the value of the property. fees for items such as title policies, document preparation,
CREDIT REPORT FEE: A one-time fee covering the cost of the recording fees, and an escrow fee.
credit report. PMI PREMIUM: Depending on your down payment, you may
DOCUMENT PREPARATION FEE: There may be a separate fee have to pay an up front fee for mortgage insurance.
covering the preparation of the final legal papers. PREPAID INTEREST: This is a per diem charge that will vary
HOMEOWNERS FEE: Some associations may require an up front depending on the time your loan closes. Interest begins accruing
deposit or dues, as well as a fee to transfer their records from Seller the day your loan closes up to your first payment.
to Buyer (transfer fee). These amounts vary for each association. TAXES AND HAZARD INSURANCE: Depending on the month your
LOAN DISCOUNT: A one-time fee to adjust the yield on the loan property closes, you may be required to reimburse the Seller for
to what market conditions demand. Some lenders refer to these property taxes. You will have to pay a year’s hazard insurance
as points. premium up front, any may be required by the lender to put a
LOAN ORIGINATION FEE: A one-time set up fee charged by the certain amount for taxes and insurance in a reserve account.
lender for their administrative costs. This account is held by the lender.

23 ARIZONA HOME GUIDE | PTAAZ.COM