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Closing Costs
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| What happens after I have applied
for a loan? |
| It usually takes a lender between 1-6
weeks to complete the evaluation of your application. It's not unusual for
the lender to ask for more information once the application has been
submitted. The sooner you can provide the information, the faster your
application will be processed. Once all the information has been verified,
the lender will call you to let you know the outcome of your application.
If the loan is approved, a closing date is set up and the lender will
review the closing process with you. And after closing, you'll be able to
move into your new home. |
| What should I look out for during
the final walk-through? |
| This will likely be the first
opportunity to examine the house without furniture, giving you a clear
view of everything. Check the walls and ceilings carefully, as well as any
work the seller agreed to do in response to the inspection. Any problems
discovered previously that you find uncorrected should be brought up prior
to closing. It is the seller's responsibility to fix them. |
| What are make up closing costs? |
There may be closing costs customary or
unique to a certain locality, but closing costs are usually made up of the
following:
- Attorney's or escrow fees (yours and your lender's if applicable)
- Property taxes (to cover tax period to date)
- Interest (paid from date of closing to 30 days before first monthly
payment)
- Loan origination fee (covers lender's administrative costs)
- Recording fees
- Survey fee
- First premium of mortgage insurance (if applicable)
- Title insurance (yours and your lender's)
- Loan discount points
- First payment to escrow account for future real estate taxes and
insurance
- Paid receipt for homeowner's insurance policy (and fire and flood
insurance if applicable)
- Any documentation preparation fees
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| What can I expect to happen on
closing day? |
You'll present your paid homeowner's
insurance policy or a binder and receipt showing that the premium has been
paid. The closing agent will then list the money you owe the seller
(remainder of down payment, prepaid taxes, etc.) and then the money the
seller owes you (unpaid taxes and prepaid rent, if applicable). The seller
will provide proofs of any inspection, warranties, etc.
Once you're sure you understand all the documentation, you'll sign the
mortgage, agreeing that if you don't make payments the lender is entitled
to sell your property and apply the sale price against the amount you owe
plus expenses. You'll also sign a mortgage note, promising to repay the
loan. The seller will give you the title to the house in the form of a
signed deed.
You'll pay the lender's agent all closing costs and, in turn, he or she
will provide you with a settlement statement of all the items for which
you have paid. The deed and mortgage will then be recorded in the state
Registry of Deeds, and you will be a homeowner. |
| What do I get at closing? |
- Settlement Statement, HUD-1 Form
- Truth-in-Lending Statement
- Mortgage Note
- Mortgage or Deed of Trust
- Binding Sales Contract
- Keys to your new home
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