Closing costs are based on the sale price of the home and general run two to fiver percent of the cost of the home. The closing costs are paid when all the paperwork is signed.
Closing costs can be paid out of pocket or rolled into the mortgage. Most of the time the buyer pays these fees. Sometimes a seller will agree to pay part of the fees and in the case of VA loans, there are seller closing costs.
Some examples of closing costs are:
• The fee for a credit report on the buyer
• A loan fee. This is what the mortgage company charges for preparing the loan paper work.
• Attorney’s fees. This may include a title search fee. Depends on whether or not the attorney does the title search. If not:
• Title search fee. This is the money paid to someone who goes to the courthouse to research the property’s ownership and see if there are any liens on it. This search doesn’t guarantee a clear title, but does promise to report any title issues.
• Title insurance. This is a one-time payment insurance policy that protects the property against claims on the title. It’s a good idea to have this because title fraud is an ever-increasing problem.
• Escrow. This is typically an advance payment on property taxes and insurance. It can also include private mortgage insurance and in rare cases, an advance mortgage payment.
The law requires a lender to give you a good faith estimate of what the closing costs will be. Understand this is just an estimate and the actual amount can be different. The law allows the actual cost to be as much as 10 percent more than the estimate. Depending on the property you are buying, this could be thousands of dollars.
For more information about closing costs, contact Wendy at http://www.EverythingTitle.com, or call (310) 927-0351