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Settlement Costs Settlement costs represent a large outlay of funds from the buyer and need to be understood throughly before making a decision. With a foreign national borrower, your total settlement costs can be broken down into four main catagories.
Down payment: For foreign nationals, the minimum down payment you should normally expect to make is 20% of the sales price of your home (with a refi/remortgage you can expect to, at most, only take your new loan up to 80% of the current appraised value-- often only 70%). You pay this to the seller of the property or to an escrow/title agent who will hold onto it for you until the time of property/loan closing. Any funds already paid as a down payment prior to closing will be counted toward your total 20% needed amount, while the lender will expect you to bring to your closing any shortage to make up this total 20% of the sale price. (Ex: if your seller/develooper only requires a 10% down payment through construction, you should expect to need an additional 10% at the time you close on your loan/buy the property). Payment Reserves:: Most lenders will require you to show 6 months of full principle and interest repayment reserves in a U.S. bank account prior to closing on the loan (some loan options do not, please ask your loan adivisor about this). This will be verified by your lender/broker, but please be aware that it is very important that you document all funds you are transfering into the U.S. by obtaining a statement/letter from the bank you are transferring the funds from, and by also keeping any receipts of the actual wire transfers. An important thing to remember: payment reserves are never taken from you. They are verified as being in your U.S. bank account before the closing, but you are not required to hand them over to the lender, nor are you required by law to use them strictly for your mortgage after closing. These are still your funds.
Escrow Ins/Taxes: : The lender will normally require you (although some programs do not require it, so please ask your loan advisor for details) to turn over a certain number of months (we normally estimate 6 months although this can vary by lender and time of year) equivalent of your expected state real estate taxes and home owner's insurance premium. As both taxes and insurance vary greatly by the area you are in and the home price, it is difficult to make too many assumptions about this amount until we have your loan approved and the underwriter tells us exactly what they expect. You may get an estimate of your property's last year's taxes from the seller/developer, and should find an insurance agent to get a home owner's quote as well, in order to get a general idea of the possibilities involved with this amount. An important thing to remember: your insurance and tax escrow account is collected from you at the time of closing, but will have its balance refunded to you upon your refinancing/remortgage, selling your property, or in any other way paying off your loan. This account is simply used by the lender to pay and discrepencies in your yearly taxes and insurance to make sure you do not fall behind. The balance refunded to you will entirely depend on how much the lender has to pay out of this account. Closing Costs: : Closing costs are the actual fees you pay to various parties involved with your transaction at the closing of your loan/purchasing of your home. We typically estimate that your total closing costs will come to between 2.5% and 3.5% of the loan amount. These fees are typically made up by seller/developer fees (which can vary substantially depending on how you negotiate your purchase contract-- another reason you should have a real estate agent), title company associated fees (these can include state filing fees, attorney fees, home owner's insurance fees, deed and mortgage stamp tax fees, and others), and our company's borrower paid fees (typically 1% on most loan programs) and any additional lender's fees. Please speak with us about possible reduction options on any of our fees, although do keep in mind we have no control over seller fees or their chosen title company's fees.
Additional Fees:
You can also expect to pay for an appraisal of your property, typically $300.
As mentioned above, you will also need to set up a Home Owner's Insurance policy and most likely, especially in hurricane season in Florida, pay for the first year's premium up-front, prior to closing. (Please ask your loan advisor if you need help setting this up).
If you would like to get an immediate summary of many of these items and an overview of the foreign national loan process emailed to you please go here, Express Pac
JRD Global Mortgage 1514 1/2 E. 8th Ave 2nd Floor Tampa, FL 33605
Phone: (813) 319-3923
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