If you’ve stayed with me through this series of articles you may recall earlier I covered closing costs. It is important that you understand what closing costs are. They are sometimes referred to as “closing costs” or “mortgage costs”. The lender MUST adhere to government regulations when providing funding. Your application for a mortgage will be taken in person or by phone and detailed on a form (USGOV # 1003)

This is a US Government form and this information becomes an integral part of the process. The information that you provide is the information the government uses for audit purposes.

Let’s say you have a run of bad luck and lose your home through foreclosure. The government guaranteed to the bank they would not lose money. If there is a rash of foreclosures the government begins to look closely for fraudulent loans. Information provided on Form # 1003, if erroneous, can be determined as fraudulent and is punishable by imprisonment. The point I’m trying to make here is to take Form #1003 seriously. Don’t “fudge” or leave out anything. Give honest answers or no answers. Once you’ve signed this form plus a bundle of additional documents they become part of a total package that eventually ends up in the archives and might later come back to haunt you.

Since you are the one buying the home, you are the one that is responsible for certain costs. These include:

1. Appraisal

2. Origination Fee

3. Credit Report Fee

4. FHA Upfront MIP Funding Fee

5. Flood Certification Fee

6. Hazard Insurance Premium

7. Hazard Insurance Impounds

8. Mortgage Insurance Impounds

9. Settlement Of Closing Fees

10. Recording Fees

11. Survey

12. Termite Inspection

On top of the above fees, there are other items that you will need money for but are not really considered costs. These are referred to as escrow monies. Escrow funds are collected at closing to pull into a special fund for the lender to pay property taxes and insurance for you. In some cases, the number of months that the lender wants to have money set aside can vary. This is like a savings account for you. It can only used for the purposes it was set aside for.

Chuck Lunsford is the owner and developer of EasyFloridaHomeLoans.com. He offers advice on how to get your credit in order and working for you. Visit his website and learn more about obtaining a bad credit home loan with little or no money down.