You have discovered your ideal house, the seller has accepted your offer, your mortgage has been granted, and you can’t wait to move in. But there’s one more step before you acquire the key: closing.
Closing, also known as settlement, transfers property ownership from the seller to the buyer. It can also be perplexing. You will have to sign seemingly endless stacks of paperwork and hand over a sizable amount for the down payment and other closing charges as a buyer. Many buyers are unaware of the expenses connected with the closing, and they may fork over thousands of dollars without fully understanding what they are paying for.
As a prudent buyer, you should be aware of these fees, which are both mortgage-related and levied by the government. Although many fees vary by location, the following are some recurring costs:
Credit Report Fee
This fee covers the lender’s request for a credit report. It’s possible that you previously paid this when you applied for your loan.
This fee covers the cost of the property’s appraisal. You may have already paid this charge when you started the loan application procedure.
Loan Origination Fee
The loan origination charge supports the lender’s loan processing expenses. The cost is usually 1% of the entire loan amount
If you decide to pay points to decrease your interest rate, you will be charged this one-time fee. Each point you buy is worth 1% of the total loan amount.
Fees for title search, title examination, title insurance, document preparation, and other miscellaneous title expenses are all included in these fees.
A lender will normally need you to pay a premium for mortgage insurance if you buy a property with a minimal down payment. This charge covers the lender’s losses in the event of a foreclosure. However, after a new homeowner has 20% equity in their property, they may usually petition to have this insurance removed
Prepaid Interest Cost
This fee covers the interest from the time you buy the house to when you make your first mortgage payment. If you purchase property early in the month, the prepaid interest cost will be significantly greater than if you purchase it later.
In areas where escrow accounts are prevalent, a mortgage lender would often open an account to hold cash for future yearly property taxes and house insurance. At least one year’s worth of premiums will be collected, plus two months’ worth of homeowner’s insurance premiums. In addition, taxes equivalent to two months more than the number of months left are paid at the end of the year
Documenting Fees And Transfer Taxes
Most states levy these fees for recording purchase paperwork and transferring property ownership.
Take Care of The Family Pets!
If you have pets, find a veterinarian that you feel you can trust. Spend some extra time with your pet both before and after the move. Moving is stressful for animals too!
Change Your Address!
And, finally, notify those you correspond with of your new address and phone and submit a change of address with the post office. Change your address on your driver’s license and remember to notify your auto insurance company of your move.
Once again, congratulations on your new home. May your family have many wonderful years living and creating memories in your new home. If there is anything we can do to help with the transition, please give us a call at (513) 777-2402.
Gary & Mary Jo Rossignol
Contact Gary Rossignol at RE/MAX Preferred Group Now!
Make sure you talk to Gary Rossignol at RE/MAX Preferred Group, who can help you figure out which fees—and how much you’ll have to pay—during the closing of your new house. Keep in mind that these charges might be negotiated with the seller during the offer stage. The seller may even agree to cover all settlement fees in exceptional cases.
Rock & Roll The After Closing Steps!
Congratulations, you’re on your road to becoming a homeowner! Follow these tips together with the advice of your realtors to ensure a smooth escrow and settlement process.
You will be asked to put down a deposit on the house you’re buying. You can put down as little or as much as you like (depending on your mortgage), but remember that the more money you put down towards the overall cost of your house, the shorter time it will take to pay off and the lower your monthly mortgage payments will be.
You will need an escrow or settlement business to function as an unbiased third party during this time so you know when and to whom you should send your money to acquire the deed to your new house. The escrow or settlement business will store your cash and manage much of the activities during the escrow period. An attorney or the broker’s trust account may also hold this deposit check to see whether you have enough money in your account to cover this check.
The check for the deposit will be cashed. The funds will be put to the home’s purchase price if the transaction goes through. If the transaction is not completed for any reason, you may be entitled to a full refund of your deposit, less than usual cancellation costs. The seller may be permitted to keep this money as liquidated damages in some cases.
Before signing a purchase contract, consult with your legal advisor at RE/MAX Preferred Group to determine whether including a liquidated damages clause in the deal is in your best interests.
Moving To Your New Home
Once all the paperwork is signed, the house is yours, and the costs are paid. Here are some suggestions:
- Change your address on your driver’s license, credit card accounts, HR records, and any other documents that need to be updated.
- Replace all door locks, clean all the gutters, and identify the gas valves and water shut-offs. These may sound obvious, but it’s easy to forget about them while you’re in the middle of a move.
- Get to know your neighbors and your surroundings. Connecting with others can assist you and your family in establishing new roots.
Obtaining a mortgage is one of the most important financial choices you will make in your life. There’s a lot to it, and it may be time-consuming. Contact Gary Rossignol at RE/MAX Preferred Group for assistance with every step of the home-buying process.
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