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What Do Closing Costs Include?

Title Fees
charges for preparing and recording legal documents, searching the title, and any other services performed to protect the lender's interest.
Origination Fee
lender's charge to make the loan.
Appraisal Fee
charge by the lender for an inspection of the property to determine its value.
Inspection Fees
cost of any other inspections required by local housing codes, government agencies, or individual lenders, such as termite or lead paint inspections (if you have not already paid for them yourself).
Mortgage Insurance
fee to the company or government agency which insures the loan in case you fail to make your payments.
Credit Report
all lenders require a credit history of the buyer. This may be included in the application fee.
Application Fee
the charge by the lender for processing your loan application.
Survey Fee
the lender may require a registered survey or a map showing the location of the house and the boundaries of the property.
Recording Fee
courthouse gets this fee for recording mortgage instrument.

Pre-Paids Include…

Real Estate Taxes
These are paid in advance and held in a special impound or escrow account by the lender. These might include a special assessment for new sidewalks or sewer improvements.
Home Insurance and premiums paid several months in advance and Mortgage Insurance also held by the lender.
Interest Charges from the date of closing to the date of your first mortgage payment.

What Happens At The Closing?
The lender's agent will ask for your paid insurance policy (or binder) on the house.
The agent will list the adjustments (what you owe the seller: remainder of the down payment, pre-paid taxes, etc., and what the seller owes you. i.e. unpaid taxes, pre-paid rents, etc.
You will sign the mortgage or deed of trust (the legal document giving the lender the right to take back your property if you fail to make your mortgage payments).
You will also sign the mortgage note (the promise to repay the loan in regular monthly payments of a certain amount.).
You will then be "loaned" the money to pay the seller for the house.
The Title (proof of ownership of the property) passes from the seller to you, usually in the form of a deed (the document that transfers the title) signed by the seller.
The lender's agent will collect the "closing costs" from you, and give you a HUD Statement (a list of all the items you have paid for). Be sure to keep this. You will need it for tax purposes.
The deed and mortgage will then be recorded (put on file) at the County Court House.


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