The Closing Process
Congratulations! You’ve signed the contract and you’re ready to close on your new home! Knowing what costs are associated with the closing and what documents you should keep from your closing will help ease the process. We’ve provided this information for your convenience.
Common Closing Costs for New Albany Home Buyers
Once your lender has disclosed a good faith estimate of all settlement costs, you’re ready to provide a cashier’s check for the closing costs. The title company is will provide you with a final settlement statement prior to closing so that you know how much to bring to closing.
This generally includes amounts for:
- down payment
- loan origination fees, if any
- 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
- inspection fees (including building inspection, termite inspection, etc.)
- notary fees
- proration for your share of costs such as utility bills and property taxes
What You Need to Bring to Closing
You will need to bring the following items with you to closing:
- The title company will need your declarations page from your homeowners insurance company commencing on the closing date
- Be sure you have called all utilities and transferred them into your name
- Bring a cashier's check payable to yourself for the balance of funds necessary to close. Typically, this sum is not available until the day before the closing. If you would like, you can use the good faith estimate as a guideline and the title company will give you money back at the closing.
- Driver's license(s) to prove who you are
- Power of Attorney if applicable
- Any additional requirements that your mortgage company may have
What to Keep From Your Closing
The following documents should be kept after the closing of your new home:
- The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need this for income tax purposes and when you sell the home.
- The Truth in Lending Statement summarizes the terms of your mortgage loan.
- The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
- The deed transfers ownership of the property to you.
- Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
- Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.
- Insurance policies provide a record and proof of your coverage.
- Your actual title insurance policy which you will receive 4 to 6 weeks following the closing.
These documents are important aspects to the purchase of your home and some may be necessary when eventually selling it. Now it’s time to ENJOY YOUR NEW HOME!
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