Hi,
I'm working on some documentation to share with my clients and thought I'd share this here as well.
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The lender will provide a good faith estimate of all closing costs. If you use a check rather than wiring money to cover your closing costs, it will probably have to be a cashier's check. The esccrow company conducting the closing will tell you the required total amount that includes:
- Downpayment.
- Loan origination fees.
- Points, or loan discount fees you pay to receive a lower interest rate.
- Appraisal fee.
- Credit report.
- Private mortgage insurance premium.
- Insurance escrow for homeowners insurance, if being paid as part of the mortgage.
- Property tax escrow, if being paid as part of the mortgage.
- Deed recording fees.
- Title insurance policy premiums.
- Survey.
- Inspection fees.
- Notary fees.
- Prorations for your share of costs such as utility bills and property taxes.
About Prorations. Because some costs are paid on a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is the method used for the sellers to pay you back or for you to pay them for bills that they may have paid in advance.
Documents to Keep From Closing
- Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs from the closing. You'll need this for income tax purposes and when you sell the home.
- Truth in Lending Statement. This form summarizes the terms of your mortgage loan.
- The mortgage and the note (two pieces of paper) which spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
- The deed which transfers ownership of the property to you.
- Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association's rules and restrictions.
- Insurance policies provide a record and proof of your coverage.
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