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The lender must disclose a
good faith estimate of all settlement costs. A check to
cover your closing costs will probably have to be a
cashier's check. The title company or other entity
conducting the closing will tell you the required amount
for:
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Downpayment
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Loan origination fees
-
Points, or loan
discount fees you pay to receive a lower interest
rate
-
Appraisal fee
-
Credit report
-
Private mortgage
insurance premium
-
Insurance escrow for
homeowners 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 fees
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Title insurance
policy premiums
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Survey
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Inspection
fees—building inspection, termites, etc.
-
Notary fees
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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 5
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.
Reprinted with permission from
Real Estate Checklists and Systems,
www.realestatechecklists.com.
Reprinted from Realtor(R)Magazine
Online permission of the NATIONAL ASSOCIATION OF REALTORS(R)
Copyright 2005. All rights reserved.
www.realtor.org/realtormag.
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