Hey, what’s going on?
It’s Scott Taylor with sandiegorealestatehunter.com.
Licensed in the state of California for both real estate and mortgages, with an emphasis on San Diego.
Now, I get a phone call from an angry person that was talking about a no cost refinance and wanted to explain to me how there was no cost in closing costs in their mortgage.
And I said, if you're confused about this [no offense], a lot of people are confused.
There is no such thing as no cost and that's why I think quotes.
So, I want to shoot a very quick video on the four different ways that closing costs can be paid,
because guess what?
There’s a lender fees, and escrow fees, and title fees and transfer fees etc.
Here's a quick rundown of our list:
- Number (1) Of course; you can pay them out of pocket.
- Number (2) You can do what’s called a lender rebate.
- Number (3) The third way, potentially, is if you're buying, you can have the seller pay your closing costs.
- Number (4) The fourth way that you can pay closing costs, would be if you got closing costs assistance.
Of course; you can pay them out of pocket.
That just simply means that you pay it from your bank account or you pay it from stocks or bonds or depending on how much it is, right.
So, number (1) is you pay for it out of pocket.
You can do what’s called a lender rebate.
So, when you hear about a no cost refinance or a no cost loan, it can be done through a lender rebate.
Very simple; you qualify at a specific rate, your rate then is bumped up, just a little bit.
That difference, there is what’s called a lender credit or a lender rebate. That's used to cover your closing costs.
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The third way, potentially, is if you're buying, you can have the seller pay your closing costs.
So, this is how it would work.
Let's say that you're buying a four hundred thousand dollar condo in North Park and you're structuring your offer like this,
“hey seller, I’m buying your awesome condo for four hundred thousand dollars,
If you accept it” [of course] “I want you to cover X dollars or X Percent of my closing costs”.
As long as the seller gets what they want, it limits your cash out of pocket.
So, it makes sense in this environment in San Diego, is it possible?
I don't know.
On certain properties, it definitely is and I see it all the time.
The fourth way that you can pay closing costs, would be if you got closing costs assistance.
A lot of times people don't understand, based off of your income or middle [inaudible 00:02:41] score or if you get a job or not; you can qualify for closing cost assistance and that's available as well.
number (1) we have an outer pocket.
Number (2), the quote unquote, no cost refi, where you use a lender rebate or a lender credit.
Number (3), on a purchase that you have the seller pay for those.
Number (4), closing costs assistance or of course, a lot of times there's a combination of things, right.
You might put in a little bit, you might have a little bit of a lender rebate and the seller might pay a little bit.
But those are the four ways.
From here, this is what I want you to do, go to my website sandiegorealestatehunter.com
where it breaks a lot of this stuff down, over five hundred articles on real estate, on mortgages, on deal structure.
There are some videos like these, educational, non-salesy videos that you can learn a little bit more about how this stuff works.
You'll notice I'm not in a big fancy studio, I don't wear a suit, I'm just like you, I'm just breaking this stuff down as simple and easy as possible.
Or if you want to get started, go to scottsloanapp.com
In twenty minutes or less, you can fill an online application, whether it's from your phone or smart device or computer.
As soon as you're done, I’ll get a tax alert and I'll call you up.
I’ll make sure that your credit report is accurate and I’ll go over it with you, I’ll listen to the type of mortgage or ideas that you have.
Based off of that, I’ll give you a list of supporting documents, things that you know that you need;
like a driver's license and social security card, and last two years tax returns and W2s, last two months bank statements, all pages, last four months’ pay checks, maybe a 401K or IRA or stocks or bonds latest statement.
Depending on what your credit report says, might need things like a short sale or foreclosure or a chapter seven or chapter thirteen or child support or alimony.
You get the idea.
Go to scottsloanapp.com and get started right now.
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