Mortgage content provided by ERate.com
1. I am a first time buyer, what is the best way to get started looking for a home?
The first step a potential buyer should take is to get pre-approved by a lender so that you know how much you can afford to purchase before starting to actually look at property. After pre-approval, the next step would be to locate a real estate agent or reliable internet resource that can help you determine where and what you would like to buy. Please refer to Why You Should Become Pre-Approved For A Loan on our website.
2. I already own a home and I am looking to move up, do I need to sell or list my current home prior to making an offer on a new property?
In the current seller's real estate market, many buyers searching for property do not have the luxury of making an offer contingent upon the sale of their current residence. The solution may be either equity or bridge financing for those buyers who need the sale proceeds from their home in order to buy a new residence. These loans would be secured against their existing residence and would provide interim financing for the new residence until the property is actually sold. If a buyer does not need the equity from their current residence in order to purchse a new residence and they can qualify for a new loan carrying both the mortgages on the existing and the new residence, they could elect not to sell their existing residence or could choose to rent it.
3. Do I need a real estate agent and how do I go about finding one?
With advances in on-line resources available today, many buyers question whether they should work with an agent. But an experienced agent earns his or her commission. In a fast moving real estate market, a good agent may learn of real estate listings before they hit the general market and can always ease the way in working with a seller and his listing agent (both at the time an offer to purchase is made as well as throughout the escrow process). When selecting an individual realtor, good questions to ask relate to experience, special education and certifications they have received, references, also check the Department of Real Estate consumer information website at www.dre.cahwnet.gov to verify the licensure and record of an agent. Additional sources of referrals are friends, co-workers and neighbors who have recently sold or purchased property. Please refer to Resources for Finding That Perfect Property on our website.
4. Is it important to find an agent that works primarily in the neighborhood where I would like to live?
If you seek the assistance of a selling agent, (an agent who works with buyers rather than sellers) they frequently work with buyers who do not always know what area they would like to concentrate their search in and therefore these agents become familiar with a wider range of neighborhoods. It may be advisable to select an agent who is familiar with the county you are searching within. Although when listing a property for sale, an agent with a thorough knowledge of a particular neighborhood may produce the best results.
5. How do I find out information about local neighborhood schools?
If you are working with a real estate agent, your agent should have information on the school test scores in your selected area. You may also contact the neighborhood schools directly for information. Comprehensive on-line resources for school information are at www.theschoolreport.com and www.greatschools.net.
6. How do I find information about specific neighborhood statistics (i.e. population, crime, local services, etc.)?
Your real estate agent should be very helpful in responding to this type of information request from you, but an additional on-line resource is www.dataquick.com/consumer/ provided by Mortgage Market Information Services, Inc. (or you may contact them at 630-834-7555).
7. Do I need the services of a loan agent/officer when applying for a loan?
The answer depends upon the experience level of a borrower as well as how complicated his or her loan transaction may be (i.e. an applicant with blemished credit or one who cannot document their income). An experienced borrower with solid credit who is looking to refinance is probably able to fly solo whereas a first time buyer or someone who is looking to close a transaction very quickly, may require the assistance and advice of an active loan agent/officer.
8. How will my real estate agent (or builder) and my lender work together to coordinate the closing?
Good real estate agents and builders keep in close contact with all parties involved in a transaction. In a typical sale, purchase contract contingencies (i.e. financing, inspections) require that an agent or builder's rep communicate well with all parties to ensure that the contingency deadlines are met. The real estate agents, builder, loan agent and escrow officer are dependent upon one another to close a transaction (no one gets paid until closing occurs) as well as for the referral of future business, so it is in their best professional interest, as well as their clients, to communicate with one another. Of course it is always a good idea for a buyer/borrower to keep in close contact with each of these service providers for a status and progress report.
9. Must I obtain financing from the lender my real estate agent (or the builder) recommends?
You are never required to use the referred (or preferred) lender of a real estate agent or builder. Most real estate agents will provide their clients with 2-3 potential sources for financing, typically agents have access to an in-house lender as well as several outside lenders who they have had good experiences working with. The referred lenders may or may not offer the best array of loan products or the lowest rates. It is always a good idea to do some loan investigating on your own and if you find that the referred lenders do offer competitive pricing then you can make both yourself and your agent happy. But if you have a complicated transaction (i.e. an unusual property) or if you have problems with your loan application (i.e. credit blemishes), you must be certain to disclose everything to any potential lender you communicate with to be are certain you are making an "apples to apples" comparison of lenders. Large builders often have their own mortgage companies or affiliated financing partners who they prefer buyers within their developments use; sometimes the builder will offer loan closing cost concessions to buyers who opt to work with their preferred lender. But the same common sense would apply, do your homework carefully before committing to any lender and always be careful when shopping that you are making a valid loan comparison (i.e. same rate, points, closing costs, rate lock duration, etc).
10. What documentation will the lender typically require from me to process my loan?
The answer depends upon the quality of your credit and the size of the down payment you will be making. On a typical fully documented loan application (where an applicant is seeking to qualify based on an employee's salary), the lender will require: one month's current paystub's, W-2's for the prior two years and bank and investment account statements for the prior 2-3 months. If an applicant is self employed (has a 25% or greater ownership in a business) then additional documentation could be required (i.e. 1040's, 1165's, 1120's, P & L statement).
11. Are there limited documentation (aka EZ doc, no income qualifier) loans available?
Yes there are many. They come in a variety of programs; some have self-employment, credit, equity or asset requirements so it may be advisable to have a loan consultant direct you to the appropriate product for your needs. There are also loans available to individuals who cannot verify either their income or assets (referred to as NINA loans). Keep in mind that these products can carry higher interest rates than that of a loan that is fully documented. A good rule to remember, the more documentation a borrower can provide for a lender, the lower the rate they will typically get.
12. What is the most important consideration when selecting a loan?
Please see Guidelines for Selecting a Loan on our website.
13. How do I determine which loan program is best suited for my personal situation?
Please see Guidelines for Selecting a Loan on our website.
14. Should I lock my interest rate at loan application or float the rate until closing?
The answer depends on one's outlook for interest rates, whether you are satisfied with the current rate being offered (and would not be deterred from proceeding if rates declined), how far out the closing date is and whether or not a rate increase could effect your ability to qualify for the loan. With a purchase, there is a contractual obligation to close on a specified date. Some lenders try to take the guess work out of the process by allowing borrowers to lock and then float the rate down one time during the loan process, typically a borrower is required to bring in a fee of ½-1% of the loan amount which is then credited (or refunded) to them at closing. It is a lock fee the lender requires to insure the transaction will in fact close.
15. Will the lender require a fee to lock in my interest rate?
For a traditional 30-90 day rate lock, the lender will not require the borrower to pay a lock fee, but for the privilege of locking for a period beyond 90 days they may. Some lenders allow borrowers to lock and then float the rate down one time during the loan process, typically a borrower is required to bring in a fee of ½-1% of the loan amount which is then credited (or refunded) to them at closing. It is a lock fee the lender requires to insure the transaction will in fact close.
16. If I decide to lock my interest rate and rates go down, will the lender give me the current lower rate?
It depends upon the lender involved and how much of a rate decline has occurred. Some lenders may re-price the loan at a rate close to market if there has been a substantial rate decline (i.e. = or >3/8%) and some may prefer that a loan is canceled rather than re-price it at a market rate. Some lenders allow borrowers to lock and then float the rate down one time during the loan process, typically a borrower is required to bring in a fee of ½-1% of the loan amount which is then credited (or refunded) to them at closing. It is a lock fee the lender requires to insure the transaction will in fact close.
17. What is the difference between a conforming and non-conforming (aka jumbo) loan?
A conforming mortgage is one that does not exceed the maximum mortgage limit of the two primary GSE's (Government Sponsored Enterprises), Fannie Mae and Freddie Mac. The current conforming maximums are: $333,700 for a 1 unit property, $427,150 for a 2 unit property, $516,300 for a 3 unit property and $641,650 for a 4 unit property. These maximums apply to all states except Alaska and Hawaii. Therefore a jumbo mortgage is one that has a mortgage amount exceeding the aforementioned limits. The interest rates on jumbo mortgages are typically between 1/4-5/8% higher than on conforming mortgages.
18. What is a super jumbo loan and how much higher (than the average jumbo loan) is the interest rate typically?
A super jumbo loan is a loan request exceeding $650,000. A super jumbo loan typically has a rate 1/4% higher than your average jumbo loan.
19. When purchasing investment or rental property, what is the difference in rate for non-owner occupied vs. owner occupied financing?
Conforming non-owner occupied rates are typically 3/8% higher than owner occupied interest rates. The down payment or equity requirement is usually higher for non-owner occupied loans as well, typically 20-30%+.
20. What is the minimum down payment required to buy a home?
There are loan products which require no down payment and are 100% lender financed. There are also products permitting 100% of the down payment to be in the form of gift funds provided by a relative. Please see Down Payment Options on our website.
21. What is the minimum down payment typically required to purchase an investment or rental property?
The down payment requirement can vary depending upon how tight money is in the economy at the time you are purchasing and can also vary amongst lenders. For example, lenders who underwrite their loans to meet Fannie Mae's and Freddie Mac's guidelines may require a 20-30% down payment (although there have been times when they required as little as 10% down). But portfolio lenders (i.e. banks & savings banks) may have looser down payment restrictions. Check with your loan coordinator, but the typical down payment required to receive the best non-owner occupied rate would be 20-30%.
22. Is it best to put down as much money as possible (or as little) towards the down payment?
This is a question that has been debated amongst tax specialists because of the IRS rules regarding the mortgage interest tax deduction. Please consult with your tax advisor if you have sufficient funds to make a sizeable down payment but are analyzing whether or not it is advisable to do so. Also see our link to the IRS website and related mortgage interest bulletins so you may read more about this subject.
23. Is it possible to borrow 100% of the purchase price?
Yes. It is possible to get either a 100% 1st mortgage or a 100% combination of a 1st and 2nd mortgage (i.e. an 80% first and a 20% second). Please see the Down Payment Options section on our website.
24. Is it possible to get a gift from a relative for 100% of the down payment?
Yes. A relative may provide 100% of the down payment as a gift, but the lender will likely ask that a letter be signed by the donor relative stating that the gift funds are not expected to be repaid. Also many loan products require a 20% down payment if the source of the down payment is exclusively from gift funds. Although it is worth noting that many portfolio lenders (i.e. banks & savings banks) may have smaller down payment requirements when the source is a gift from a relative. Please see the Down Payment Options section on our website.
25. Can I borrow the funds for the down payment?
Yes. It is possible to borrow against an asset that you currently own for the down payment. For example you can borrow against your 401(K), assuming that your company plan permits it, and you could also borrow against your current residence to purchase a new one (i.e. a bridge loan or an equity line). You may also borrow against your fully invested stock portfolio, avoiding the tax consequences of selling prematurely. Please see the Down Payment Options section on our website.
26. Is it possible to borrow against (or liquidate) my 401(K) or IRA for a down payment and if so is this a good idea?
Yes. You may borrow against your 401(K) to purchase a home as long as your company plan permits it. You may also cash out of your retirement account and pay penalties and withholding taxes if you prefer. Whether or not it is advisable to do so depends on how long it will take to either repay the debt (if you plan to borrow against it) or whether you look at a home purchase as an investment or a place to live (if you plan to liquidate). If a home is an investment, do you believe that you can achieve greater appreciation of these funds in real estate or in some other investment vehicle. If you plan on purchasing property as a place to live, then perhaps borrowing funds for the down payment or saving and postponing your purchase would be preferable to liquidating and paying taxes and penalties on your retirement accounts.
27. What is mortgage insurance and am I required to have it?
Mortgage insurance (MI) is paid by the borrower to protect the lender against payment default on the mortgage and is required when only one lender is financing in excess of 80% of the value or purchase price of a property. It can also be required at other times if the lender perceives a higher risk associated with a particular loan program. There are financing options limited down payment borrowers can employ to avoid mortgage insurance for example, obtaining both a 1st and a 2nd mortgage rather than applying with one lender for a 1st mortgage over 80.00%. Please see the Down Payment Options section on our website.
28. Is mortgage insurance something that I should avoid if possible?
In July of 1999, legislation became effective which requires mortgage insurance (MI) companies to terminate their borrower paid insurance policies once a borrower's loan balance reaches 78% of the original property value (there are exceptions to this law, i.e. lender paid (MI), so read your mortgage insurance disclosures carefully). It is important therefore to weigh whether it is cost effective to pay the mortgage insurance premiums for a period of time until one has sufficient equity to remove it or to make monthly payments on a higher interest second mortgage for a term of 15 to 30 years. Of course tax considerations should also be examined as interest on a second mortgage is more likely to be tax deductible than a policy of mortgage insurance. Consult your tax advisor and please use our link to the IRS website for additional information.
29. How can I avoid having to get mortgage insurance on my loan?
Many borrowers who have less than a 20% down payment, choose a combination first and second mortgage (referred to as a piggyback loan) to avoid mortgage insurance (MI). The most common method of financing without MI is an 80-10-10 (an 80% 1st mortgage, 10% 2nd mortgage & a 10% borrower down payment). Also available is an 80-15-5 (requiring an 80% 1st mortgage, 15% 2nd mortgage & a 5% borrower down payment). Please see the Down Payment Options section on our website.
30. If I do get mortgage insurance, how can I eliminate it?
In July of 1999, legislation became effective which requires mortgage insurance (MI) companies to terminate their borrower paid insurance policies once a borrower's loan balance reaches 78% of the original property value (there are exceptions to this law, i.e. lender paid (MI), so read your mortgage insurance disclosures carefully). Borrowers are entitled to receive a refund of the unearned portion of the premium they paid once the mortgage insurance policy is canceled. Additionally, all loans with borrower paid mortgage insurance polices which closed on or after 7/29/99, lenders are required to notify borrowers annually of their rights surrounding the cancellation process.
31. What is Homeowner's (aka Hazard) insurance?
Homeowner's insurance protects both the owner as well as the lender against the occurrence of physical damage to the property (i.e. fire or burglary). Some perils are not generally covered by the standard homeowner's polices, for example floods and earthquakes. Also, properties located in areas prone to fires and windstorms may have difficulty obtaining standard insurance policies.
32. How much Homeowner's insurance coverage will I need?
A safe bet is to buy a guaranteed-replacement-cost policy which will generally pay out 20-50% more than the face value of the policy to rebuild your home (this is also the preferred policy of lenders). A replacement-cost policy typically adjusts the amount of insurance each year to keep pace with rising construction costs in your area. It is important to note that local building codes require structures to be built to specific standards which could vary over time, if your home is severely damaged, you may be required to rebuild it to current codes. Even guaranteed-replacement-cost polices do not always cover this expense. However, many insurers offer an endorsement that will pay for the upgrading cost, it is a good idea to consider adding such an endorsement to your replacement-cost policy.
33. Must I also have earthquake insurance coverage?
The lender should not ask you to add quake coverage to your standard policy unless your property is located in an earthquake hazard zone.
34. Must I have flood insurance coverage?
The lender should not ask you to obtain a flood policy unless your property is located in a flood hazard zone.
35. What is title insurance and why do I need it?
Before you purchase a property or close on a new loan, it's essential to know that the title to the property will be free and clear, free of prior defects and indebtedness. A homeowner and prospective lender need to be certain that what is available on the property is what is referred to as a "marketable title". A title company researches the legal history of the property which entails searching public records in the offices of the county recorder. Problems with the title could threaten the mortgage, limit ones use and enjoyment of the property and could result in financial loss. A policy of title insurance protects a homeowner's title and the insurer covers the cost of any legal challenges.
36. What is the best way to shop for insurance?
A reliable method of shopping for both homeowner's and earthquake insurance is to get estimates from at least three high-rated companies. Be prepared to discuss the type of policy you want as well as the coverage limits you require You may check insurance company ratings at the following websites: www.ambest.com and www.insure.com . If you find you are in need of flood insurance, you may contact the National Flood Insurance Program at (800)638-6620 for a quote.
37. I am purchasing a condo (or townhouse or PUD) and I have been told that I need project approval, what is it and who handles it?
Project approval is performed by the lender who will be funding your loan. The approval process usually involves a questionnaire (aka certification or warranty letter) being completed by either the development's Homeowner's Association (HOA) or the property management company. Often, the HOA or management company will require a nominal fee from a borrower or buyer to perform this service and will submit a bill to escrow. The questionnaire, once completed, is then returned to the lender for a compliance review. The lender will then ascertain whether the development's legal and financial position meet their guidelines. In many cases, if the development is a sizeable one, the lender may have already lent within it and could have all necessary documentation for approval on site. The title company may also provide needed documentation for the lenders review, for example, the project's budget, by-law's and covenants, conditions and restrictions (CC & R's).
38. What is the function of the HOA (Homeowner's Association)?
In some states, Homeowner's Association's are legally required for developments where residents share an interest in common property, such as condominiums or townhomes. The association is headed by a board of directors which generally follows a set of by-laws regarding maintenance, upkeep and other issues pertinent to the development. The development's unit owners must become members of the association and comply with its by-laws and pay dues or fees to finance maintenance and other development expenses (i.e. the master insurance policy).
39. What expenses are typically covered in the HOA dues?
HOA dues cover the general maintenance and upkeep of all common areas within the development. These dues also contribute to the premium payments for the master policy of insurance, which protects all unit owners. Also included in HOA dues are major repairs not covered by insurance, the HOA could handle these unexpected expenses by a special assessment of all unit owners or by raising the association dues.
40. If my development (or project) has an HOA, what type of insurance am I expected to obtain independently?
The master insurance policy, which is purchased on behalf of all unit owners by the HOA, covers all units or structures located within the development but does not typically cover an individual unit owner's personal belongings located within their dwelling. Therefore, it is advisable to purchase a separate contents coverage policy for the protection of personal possessions. Check with your HOA or property management company for the coverage details of the master insurance policy.
41. I am purchasing a condo (or townhouse or PUD) and I am aware that the HOA is currently in litigation with the developer, will I be able to obtain financing in the development?
A Homeowner's Association could leave itself open for legal action if it doesn't act on legitimate building defects or disclose these defects to prospective buyers. However the fact that an association is suing a developer can impact a potential buyer's ability to obtain financing. It is vital to let your lender know up front if the development or project you are making an offer on is in litigation. It is usually possible to obtain financing in such situations, but it will limit the number of lenders who might be able to finance your purchase. In some cases the lender may require a larger down payment and the interest rate could exceed that of standard financing programs.
42. What is the difference between loan pre-qualification and pre-approval?
A pre-qualification occurs when a prospective buyer discloses, either verbally or by providing documentation of, their income, assets and credit so that a loan agent may determine the loan amount that a buyer could likely qualify for based on standard lending guidelines. A pre-approval involves an underwriter (the lender's risk evaluator) actually reviewing a prospective buyer's loan application with a formal credit determination occurring that is subject to an appraisal, title report and purchase contract, along with whatever supporting documentation the underwriter may request.
43. Is it necessary to get pre-qualified before making an offer on a property?
It is always a good idea to have a lending professional or service evaluate your finances and render a determination of your loan qualifications prior to actually looking for property. To avoid frustration, before setting out to make an offer, know what loan amount you could likely qualify for.
44. Is it necessary to get pre-approved before making an offer on a property?
In a seller's market, where multiple offers commonly occur, it is a good idea to go through the loan pre-approval process prior to submitting an offer to a potential seller. Prospective buyers who do not take the time to become pre-approved are severely handicapping themselves in a seller's market.
45. How long does it take to get pre-qualified or pre-approved for a loan?
Loan pre-qualification can occur in a matter of minutes, in the time required to communicate your financial circumstances to a lending professional so they can crunch the numbers. Loan pre-approval could involve more time up to 1-3 days to gather the applicant's income, asset and credit documentation and to have an underwriter review it. Whether you are requesting a pre-qualification or pre-approval, ask for it in writing. Both your real estate agent and a potential seller will want a letter from your lender. |back|
46. Once the offer is accepted, how long will it typically take to close the transaction?
This can vary from one transaction to another, depending upon seller and buyer contingencies. But in a tight seller's market, the typical closing will occur within 30-45 days. In a buyer's market, where there are many properties available for sale, closing could usually occurs within 30-90 days.
47. What types of problems typically cause closing delays?
This varies from one transaction to another, but the typical closing delays relate to a failure to satisfy loan conditions quickly or a buyer's delay in setting up their homeowner's insurance. The loan condition that most frequently causes problems in the end is a borrowers lack of documentation regarding the source of funds for the down payment and closing costs. Lenders want to see a paper trail of all funds transferred into escrow, and unless a borrower takes the time to document the liquidation, withdrawal and transfer of funds along the way, they must scramble at the end of the transaction to re-create their trail. Lenders are frequently remiss in communicating the importance of keeping good records during the escrow process. If the property in question is new construction, building and completion delays frequently occur depending upon weather delays, contractor and sub-contractor problems and the builder/developer involved.
48. What type of closing costs can I expect to pay on my loan?
Please see Explaining Your Estimated Closing Costs on our website. |back|
49. Which mortgage related closing fees will the lender typically collect from me up front?
The appraisal and credit report fees are the third party fees that your lender or broker will typically ask that you pay for up front. The appraisal fee on an owner-occupied standard tract home will range between $300-$400. A tri-merged credit report reflecting three credit bureaus ranges between $26-66.
50. Which closing costs associated with my purchase are tax-deductible?
Please see the IRS link on our website where this information is outlined. Also consult with your tax advisor.
51. Is it best to pay points up front to reduce the interest rate?
When points are paid on a loan, the result is to buy down the interest rate, typically 1 point (or 1%) will buy the rate down .25%. The key to analyzing whether paying points makes financial sense is to determine: 1) How long do you anticipate remaining in the property? 2) When would the breakeven point occur? For example if you pay two points to buy your rate down from 8.00% to 7.50% on a $300,000 loan, the payment at 8.00% would be $2,201 and at 7.50%, the payment would be $2,098, with the difference in payment amounting to $103/month. With two points costing $6000, divided by the savings of $103/month equaling 58.25 months or 4.85 years to break even. You would want to hold the loan and remain in the property approximately 5 years for this to make sense. Other factors to consider are the tax implications of paying points (see our link to the IRS website) as well as the time value of money (could you put these funds to better use).
52. What is the difference between a zero point and a no cost loan?
With a zero point loan, a borrower has opted not to pay points to buy their interest rate down but will still be paying for their base closing costs (i.e. appraisal, credit report, lender doc fees, title and escrow, etc.). With a no cost loan, a borrower has accepted a higher interest rate, (typically .25%-.375% higher than on a zero point loan) with the trade off that the lender or broker will pay for all their non-recurring closing costs (all base closing fees except for interest, taxes and insurance due).
53. Is it possible to obtain a no cost loan on a purchase mortgage?
Yes. The rate may vary depending upon the costs the buyer is responsible for paying. For instance, the party paying for title and escrow fees is determined by your purchase contract and is based upon the custom of the county you are purchasing within. If the seller or builder is responsible for paying these big expense items, it is easier for a buyer to obtain a no cost loan. If the buyer is the party responsible for covering these expenses it may still be possible to obtain a no cost loan although the rate may be higher than it would typically be for no cost financing.
54. What is the APR and how is it calculated?
APR stands for annual percentage rate and its purpose is to give borrowers a truer representation of the effective interest rate on their loan. APR factors in certain closing costs and fees and spreads these costs over the life of the loan, along with the note rate, to arrive at a more accurate annualized percentage rate than the note rate alone represents.
55. How can I find a qualified, reputable CPA to advise me?
There are always the "big five" accounting firms to rely on and referrals from family and friends are also advisable. Another helpful on-line resource for finding qualified professional service providers in your area is www.valuestar.com. Also check out www.cpalink.com.
56. What is the best way to shop for a loan?
It is a good idea to contact at least three to five lenders for input on loan programs and rates. You can do all of your shopping on-line or by phone. If there are any usual twists to your loan scenario, it is best to disclose as much information up front as possible to be certain you are making an "apples to apples" loan comparison amongst lenders. When making loan comparisons, you must be sure you are comparing loans of similar terms, i.e. a 30 year vs. a 5 year, paying points vs. zero points, do the loans you are comparing have prepayment penalties and do they have similar rate lock duration's?
57. Will the lender require an appraisal of the property? If so, will I receive a copy of it?
Yes. The property is the collateral for the loan, therefore an appraisal is almost always required and if a borrower pays for the appraisal he or she is definitely entitled to receive a copy of it.
58. What is a loan prepayment penalty and is it generally advisable to get a loan that has one?
A prepayment penalty on a loan allows the lender to charge a borrower additional interest, typically six months worth, when a loan is repaid during the penalty period, which is usually somewhere in the first three to five years of the loan. If a loan does have a prepayment penalty, this is clearly stated within the mortgage disclosures, mortgage note or prepayment penalty rider to the note. The advantage of taking a loan with a prepayment penalty is that it could carry a lower rate of interest or you may be permitted to take a loan without paying for non-recurring closing costs