Expert: Jessica Bryan - 1/20/2007

Question
Jessica,
I have my son buying his house first time in Maryland. He is paying 20% advance payment & rest thru lender.His credit score is 670. My questions are as follows:
1. Can he get special concessions being the first time house owner.?
2. Does he need a Morgage insurance?
3. What are the other costs other then Interest & principal a lender can add to the loan amount & is it necessary?
4. What would be the closing cost approximately in percentage of loan being borrowed? My son wants to pay that in cash.
5.Who pays the Estate agent his comission.?
Many thanks

Pervez  A. Malik

Answer
Dear Pervez;
Your son will need to talk to a lender to find out if there are any first time buyer programs available to him.  Usually these are for low income first time buyers who don't have 20% down.  I don't know of any special programs or concessions other than those.  He will not need mortgage insurance with 20% down.  His monthly payment will be Principal, interest, taxes and insurance (homeowner's). He may also have homeowners association payments and if so these might also be calculated into his monthly payment.  The taxes and insurance may or may not have to be part of his monthly payment as he can opt to pay in various ways--once a month, twice a year or annually.

His closing costs are usually about 3% of the purchase price of the home which will cover attorney fees, survey, title insurance, first month's payment, lender fees and commissions, points on the loan, and misc. fees for filing, recording, packaging and processing. He may also have to pay any costs that he didn't cover for inspections.

The commission to the real estate agent is paid by the Seller through the proceeds of the sale so your son will not be responsible for that.

I hope that this helps.

Sincerely,
Jessica Bryan