The final part of any real estate property acquisition process involves closing the deal which comes with all sorts of closing costs and fees. It is the intricacies surrounding this part of the acquisition process that seem to confuse most home buyers. Anyone looking to invest in Manhattan Beach homes should understand the following two categories of closing costs:
•Fees payable to the two government tiers, that is; local and state governments such as state, county and city transfer taxes, as well as taxes for prepaid property and recordation fees. Los Angeles, where Manhattan Beach is located, has a county transfer tax of $1.1 per every $1000 of the total transaction value.
•Mortgage and loan obtaining costs such as interest prepayments, mortgage & hazard insurance, commitment & processing fees, loan documentation & origination fees, credit checks, appraisals and title insurance fees. Some of these levies are not applicable to investors who buy their Manhattan Beach homes on a cash basis.
The good news is that the process of placing offers and counteroffers, for Manhattan Beach homes, is usually characterized by a negotiation of these fees. The Good Faith Estimate (GFE) from the lenders spells out all the closing costs involved in the transaction. It is advisable to solicit at least three GFEs from different mortgage lenders so that you can be assured of the best closing costs charges. It is good to note that these are only estimates which might differ with the actual costs payable. HUD-1 settlement statement lays down the actual charges payable by the borrower as closing costs a day before the actual settlement.
Below are some of the most common fees of any deal closure involving Manhattan Beach homes according to the California Association of Realtors (CAR):
•Property inspection fees: It is vital that all Manhattan Beach homes for sale intended for sale have an inspection carried out them especially during escrow. Qualified inspectors are capable of detecting anomalies within the property which will give you ample time to request for repairs. This fee ranges from $275 to $450 depending on the property size.
•Origination points: This fee is payable to lenders for the evaluation, preparation and submission of the proposed mortgage. This fee takes the form of a percentage.
•Application fee: This fee is payable to the lender at the exact time that you file your application. It covers the lenders cost for the processing of your loan information. It is a non refundable fee in the event that your loan application is rejected or you change your mind.
•Appraisal fee: This usually ranges from $150 to $400 depending on the size of the property in question. It is used to pay an independent firm so that they can carry out appraisals on the property that you intend to purchase. This estimate is important to lenders so that they can be able to determine the amount of money to advance you as loan for any of the Manhattan Beach homes.
•Credit report fee: It gives lenders an insight into your credit status. It ranges from $45 to $55.
•Title insurance and title search: This fee covers all detailed examination of any historical record touching on your chosen property at Manhattan Beach. The primary intention of the search is to assure the buyer that he or she is doing business with the property’s legal owner. Common defects unearthed by the title search and which are not necessary limited to Manhattan Beach homes include unsatisfied mortgages and unpaid taxes. This particular levy is vital in cushioning property owners against ownership tussles.
•Title insurance: Protects you, as the buyer, in case of a legal suit or claim arising from some unpaid mortgages, tax liens or any other technicality that might have been overlooked during the property’s title history research. Should the claim be found to be valid, you stand to be compensated fully according up to the policy’s face amount. Apart from the owner’s policy, title insurance also consists of the lenders policy which protects the property interests of the lender as far as the outstanding balance is concerned.
•Property taxes and insurance premiums: Lenders usually require buyers to pay for real estate taxes and insurance premiums; all of which are due after the closing process is duly finalized.
•Other closing costs associated with Manhattan Beach homes include flood certification fee which amounts to $30 for any property that may be located in a zone prone to flooding, interim interest and a recording & transfer fee ranging between $50 and $150 for covering the costs incurred during the recording of your Manhattan Beach home.