|
< About Buying Real Estate
You’ll likely be responsible for a variety of fees and expenses that you
and the seller will have to pay at the time of closing. Your lender must
provide a good-faith estimate of all settlement costs. The title company or
other entity conducting the closing will tell you the required amount for:
- Down payment
- Loan origination
- Points, or loan discount fees, which you pay to receive a lower interest rate
- Home inspection
- Appraisal
- Credit report
- Private mortgage insurance premium
- Insurance escrow for homeowner’s insurance, if being paid as part of the
mortgage
- Property tax escrow, if being paid as part of the mortgage. Lenders keep
funds for taxes and insurance in escrow
accounts as they are paid with
the mortgage, then pay the insurance or taxes for you
- Deed recording
- Title insurance policy premiums
- Land survey
- Notary fees
- Prorations for your share of costs, such as utility bills and property taxes
A Note About Prorations: Because such costs are usually paid on either
a monthly or yearly basis, you might have to pay a bill for services used by the
sellers before they moved. Proration is a way for the sellers to pay you back or
for you to pay them for bills they may have paid in advance. For example, the
gas company usually sends a bill each month for the gas used during the previous
month. But assume you buy the home on the 6th of the month. You would owe the
gas company for only the days from the 6th to the end for the month. The seller
would owe for the first five days. The bill would be prorated for the number of
days in the month, and then each person would be responsible for the days of his
or her ownership.
Learn more
about real estate closings
< About Buying Real Estate
|
