Of course the sale of your home is a big transaction. Included in that transaction will be some fees that the seller has to pay. These usually come out of the proceeds of the sale of the home. Here is a list of some of those costs:

* Real estate agent commissions
* Recorded release of the sellers liens
* Remaining interest accrued on the sellers 1st and 2nd mortgages (if there is a second)
* Possible prepayment penalties
* Credit to buyer of unpaid property taxes

Real Estate Agent Commissions

If you used a real estate agency to list and sell your home, then there will be a commission of 3 to 7 percent of the sales price. This commission becomes part of your closing costs and is subtracted from the monies you will be receiving at closing.

Recorded Release of the Sellers Liens

You may be wondering why this is necessary. It is only necessary if you still owe money on the property for sale. The mortgage company the buyer uses wants to be sure that there is free and clear title. So you have to provide proof that any liens on your property has been released. This is done by filing a lien release document for each lien (1st or 2nd mortgage). Then that document has to be recorded and there certainly is a fee for that. That fee is part of those mortgage closing costs the seller pays.

Remaining Interest Accrued

This sometimes surprises the seller. Most home mortgages and 2nd mortgages interest are paid in the arrears. What that means is the payment you made on the 1st of the month paid the interest for the previous month. So depending on when the closing is set, usually there is interest that has accumulated and needs to be paid. These too are the sellers responsibility and will show up on the closing statement.

Possible Prepayment Penalties

Some mortgages have a prepayment penalty clause in them. If that’s the case with the mortgage the seller just paid off with the proceeds of the sale of the house, then you will see that penalty as a home loan closing costs for the seller. The penalty for this can vary with a fixed percent of the loan amount or the former lender will use a fixed amount. This fixed amount can be six months interest payments. Be sure to check on this possible fee. It can make a difference on when you, the seller, want the closing to be.

Credit to Buyer of Unpaid Property Taxes

Most property taxes are paid in the arrears. Each state may vary as to when they bill for these taxes. So depending on when you close and when the bill is due there may be some property taxes you owe and will have to credit the buyer for these. These costs will also show up on the statement as the sellers closing costs.

There are other costs that could be included like an inspection fee, home warranty, or seller concessions agreed upon between the buyer and the seller that may be closing costs for the seller as well.

What we should focus on is the perceived lie that we were told. If you have an interest rate of let’s say for example sake 4%. Let’s also say that we just bought a new home for $250,000. Now of course we want a low mortgage rate and we want our monthly payments to be as low as possible. So for our 30 year mortgage we have a very low interest rate, but does this mean that the mortgage business did us a favor? How well did we make out? The only thing that was accomplished so far is providing you with more realistic platform to keep paying your monthly payments on time. This is insurance for the mortgage company, as they want you to give them 30 years worth of interest, because that’s where the fortune is for them.

I didn’t mean to get off track, I apologize so let’s keep it moving. If you had $100.00 at the same 4% interest rate that we are using with our loan example. When you paid it back that would be $4.00 dollars. So you borrowed $100.00 and paid back $104.00 that would be great if it was true. So in our example a $250,000 mortgage at a low mortgage rate of 4% we should pay back $10,000 in interest which is 4% of our $250,000. We both know that this is crazy and would never go down this way. Mortgage companies,bank companies, no lender deals in simple interest. Compound interest is how they make theri fortunes, Albert Einstein said “The most powerful thing ever invented was compound interest”. Simply put what the bottom line is, you end up paying around $143,480 in interest over the course of the loan. That’s actually 37% close to 38% percent more than you paid for the house $394,000 in total.

So my point is regardless if you have a low mortgage rate of 4% or better or a higher rate of 10%, you are going to pay substantially more for your home in the end. When you think about it, no one has it better than the lenders. I understand the run of the mill person could not buy an entire house in full like buying a soda. However, not a soulshould have to devote their entire life to being in debt and paying just about double the price for their house. If your interest rate is elevated you could realistically be paying almost triple the price. So if there was a way to pay down this huge amount of debt in let’s say 2-3 years, why wouldn’t you explore it.

A lot of experts will argue that you should keep your mortgage and remain in debt. For myself I don’t comprehend that argument, clearly you can see that your money will either go to the bank or mortgage company for the next 30 years as option A. And option B would be to alleviate the loan off as soon as humanly probable allowing alarge portion of that $143,480 to remain in your pockets. Your retirement account would be quite different if the cash which went towards interest, was instead invested over thirty years. The compound interest formula would suggest that you could easily become a millionaire if that same money were working for you instead of against you.

Finding mortgage lender is not as simple as you think before. It requires hard work in searching for suitable mortgage lender. Many things to consider such as interest rate, warranty, and the length to take the mortgage are few to mention. It requires discussion with expert first before you decide to take the mortgage. You can also take home equity loan or mortgage refinance that is the application to take second loan to pay off your first mortgage.

The most common type of mortgage, fixed interest rate mortgage looks interesting since you have to pay the same interest rate during your period of mortgage. But its premium rate is higher than any other type of mortgage. You should dealing with some researches and cross checking if you want partner with reliable home loans or mortgage company.