Just like an athlete training for a competition, you can prepare for the overwhelming final steps of buying a home. Security deposit procedures and rules vary by state, but these are 10 of the most common problems encountered during this period and what can be done, if anything, to avoid or mitigate them. The reasonable faith estimate is a draft of the information on Form HUD-1 that you receive at least 24 hours before closing. As the name suggests, the good faith estimate should be a close approximation of what you end up paying, ideally within 10%.
Keep in mind that some unscrupulous lenders will try to attract customers with unrealistic estimates. Closing costs are used to pay various fees related to buying a home, often between 3% and 6% of the total mortgage loan. How could this happen? Loans fall from time to time, when lenders stop operating, credit guidelines change abruptly, the buyer's credit rating or income changes between prior approval and escrow, or the property is not taxed at the purchase price. The fact that your loan collapses during escrow, when your heart is set on a particular house, is enough to make you scream or cry, or both, even alternating.
It's also a cost you'll have to pay every month until your mortgage is paid or until you sell your home.
