Skolnick's Scoop / Expectations at closing
Published 1:01 am, Friday, May 7, 2010
The final step when buying a new house is "the closing."
The closing, or final settlement, is the culmination of all the previous steps -- from offer, to acceptance, building inspections, title search and approval of a mortgage.
The buyer, seller, their attorneys and real estate agents literally sit at a table (the closing table) together and sign all pertinent documents, paying off previous taxes and water bills, while the purchaser writes new checks along with their mortgage banker, toward the purchase price of the property. Title is transferred and the new owner is handed the keys to the house.
So what should you expect at the closing table? The buyer will sign their loan with the bank (if they are securing a mortgage), and will pay their closing costs. The Federal Truth in Lending disclosure form needs to be reviewed and signed, which discusses the terms of the loan, including the amount borrowed, loan percentage rate, payments due and an itemized list including principal, interest along with escrow taxes and any other monthly charges. You will review and sign title documents, the deed (which is the actual paper that transfers title of the property), and disclosures.
You should receive your HUD-1 form at least one day before closing. This is a settlement document for the closing agent (typically your attorney) itemizing all charges imposed on a borrower and seller in the real estate transaction. It is meant to give you a picture of the closing transaction by providing both parties with a list of incoming and outgoing funds. All buyers are referred to as "borrower" on this form even if no loan is being used.
Fees that sellers and buyers can expect to pay may include appraisal fees, fee for a credit report, a loan origination fee, points (a prepaid loan discount), Private Mortgage Insurance (PMI) if there is less than 20 percent equity when purchasing, title insurance, state and city recording fees, attorneys fees and real estate commissions.
Once all documents are reviewed and signed, the final stages begin. If the funds are in order, the title is delivered clear of encumbrances and the deed is correct. Then funds are disbursed to the seller for the agreed price of the house. The buyer will need to bring a certified check for the down payment and any closing costs that are not built in to their mortgage. An escrow account will also be set up at this time for real estate taxes and even home owners insurance, if necessary.
At conclusion, when all documents are signed and funds distributed, the buyer will receive the keys and the seller will receive the balance of the funds left after paying off any loans and or liens that existed prior to closing. The only thing left is to give the movers the approval to start moving your furniture into your new house!
Conforming to $417,000
"¢ 30-year fixed -- 4.875% (4.885% APR).
"¢ 15-year fixed -- 4.250% (4.267% APR).
"¢ 5/1 ARM -- 3.750% (3.534% APR).
Conforming/Jumbo to $708,750 (Fairfield County)
"¢ 30-year fixed -- 5.125% (5.125% APR).
Jumbo: $750,000 to $1,500,000
"¢ 30-year fixed -- 5.750% (5.776% APR).
"¢ 15-year fixed -- 4.750% (4.793% APR).
"¢ 5/1 ARM -- 4.000% (3.320% APR).