The Final Step - Going to Settlement

 
The big day is here! Joining you at settlement will be your attorney or title company representative, the listing and selling brokers, and all owners. The attorney will have searched the title, provided title insurance, and obtained old and new lender instructions.

After all unsettled walk-through issues are resolved, the attorney will explain the following:
  • Deed of trust or mortgage
  • Deed of trust note or mortgage note
  • VA, FHA, or lender forms
  • Settlement sheets
You and the seller will then sign all necessary forms. You will also pay the balance of the down payment and buyer’s closing costs with a cashier's or certified check.

Open Look At Closing Costs
Under the Real Estate Settlement Procedure Act (RESPA), you will be given an estimate of closing costs by the lender, in advance of the settlement. In addition, the lender will require an appraisal fee and a credit report fee in advance of the settlement.

Closing costs usually average between 3% and 7% of the sales price. Typical closing costs include:
  • Loan origination fee
  • Mortgage insurance premium
  • Attorney fees
  • Owner and lender title insurance
  • Recording fees
  • County tax stamps
  • State tax stamps
  • Survey fees

In certain cases, some of the closing costs may be paid by the seller. This is particularly true for new housing, where the seller is the builder.

A few other expenses, not required to be listed under the law, may also have to be paid at closing. These include advance deposits held in escrow for real estate property taxes and insurance. The lender collects a portion of these every month and then pays the insurance and taxes when they are due.

Sometimes closing costs can amount to a sizable sum. Remember that some of the items are tax deductible. The loan origination fee, prepaid interest, and property tax adjustments may be such items.

Congratulations
Once the house keys are transferred, you are the proud owner of your new home. Congratulations!