When it is time to close your new loan the meeting will likely take place at an escrow company,
title company or attorney’s office. Take time to thoroughly read all documents to ensure that
all information is correct, such as payment terms, interest rate and scheduled payments. Do not
hesitate to ask questions. You will sign the title and mortgage documents and pay appropriate
closing costs, which may include:
- Attorney's fees.
- Credit report.
- Escrow and title company costs.
- Loan origination fee.
- Pest inspection.
- Recording fees charged by your local government.
- Survey fees.
- Title search and insurance fees.
| Prepaid Items
|
|
Private Mortgage Insurance (PMI)
|
Protects the lender if you default on your loan. If you cannot put at least 20 percent down
and wish to avoid PMI charges, you might consider a second mortgage (or Purchase Money Second).
Discuss this option with your lender and your tax accountant.
|
|
Prepaid Mortgage Interest
|
Most lenders require you to pay for the mortgage interest that will accrue daily between the
closing date and the end of that month.
|
| Escrow Account
|
|
Homeowners Insurance
|
Typically, you pay the first year's premium in full, plus two monthly payments, which are
used to create an escrow account from which future payments are made.
|
|
Property Taxes
|
The escrow company will prorate your share of the property taxes. You may be
required to deposit money on reserve for future taxes.
|
These costs generally must be paid with your mortgage payment if your down payment is
less than 20 percent. With down payments equal to or greater than 20 percent, PMI is not
required, and you may choose to pay insurance and property taxes separately. Consult your
lender for more information.
|
Selling A Home
Selling A Home
Previous