Closing Costs and Procedures

Settlement or “closing” usually takes one of two forms.
1. You, your agent, and attorney (if desired) meet with the sellers, their agent and attorney, and a representative of the title company to close the sale and complete the paperwork to transfer the property.
2. An escrow officer is appointed to make all the preparations for closing and brings in the buyer and seller separately to sign the respective documents. Either way, you should be prepared with the following:
• Your new homeowner’s insurance policy. If the first year has been prepaid, bring the receipt. If not this will be paid at closing. (See Homeowner’s Insurance below
• A certified or cashier’s check for any balance on the down payment plus closing costs.
• Your check book in case of incidental costs not included in the settlement estimate provided by your lender.
• A good pen and sturdy hand to sign all documents including the mortgage and mortgage note which specifies your monthly principal and interest payments.

Closing costs vary depending on price, terms, location and other factors. Your lender should provide you with a pre-settlement estimate so you don’t have any surprises, however. It’s advisable to be prepared for a few extra incidentals at closing. Here are the expenses you should expect.

• Loan origination fee (typically 1% of mortgage)
• Discount points - you may “buy down” your interest rate by paying points (each point = 1% of loan amount)
• Title search • Title insurance fees
• Survey (if required)
• Appraisal Fee
• Transfer tax (state/local tax - varies)
• Prepaid interest - covers time between settlement and first payment
• Prepaid mortgage insurance premium
• Home insurance premium
• Proper tax escrows
• Attorney or escrow company fee
• Recording fees

Finally, after all the documents are signed, and fees paid, the home is yours!