Mortgage Matters with Chris & Bob

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We get a lot of questions, many from very seasoned buyers who have purchased several homes.  If you have a question, please email and we may use it in an upcoming article.

This weeks question comes from a financial savvy client Moving to Waxhaw, NC from the West coast.

Q.  What are these prepaid and why do I have to pay them to get a mortgage?

A.  Prepaids are exactly what it sounds like. They are prepaid payments made in advance of monies due in the future, in order to account for property taxes, insurance and special property assessments.  If you are shopping for a mortgage many lenders do not include them as they change with each property, but once you have a property identified they should be disclosed to you on a Loan Estimate (LE).  You will also have prepaid interest due depending on the day of the month that you close, to account for days of interest to the end of the month you close in.  By separating out the actual closing costs from the prepaid items makes it a lot easier to shop for the best mortgage, but can also be very confusing.  The simple test you can use is by asking yourself, is this an item that you would have to pay to buy a house if you were not getting a mortgage?  If the answer is Yes,  then the majority of the time it is a prepaid.

Every Case is different, be an informed buyer and feel free to reach if you have any questions!

Chris Conlon 704-609-5017

Bob Parm 704-778-2603

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