CLOSING
It is not required that you attend the closing, if you've given an acceptable power of attorney or taken the necessary steps to complete a mail away closing. Your personal mortgage processor can help determine your options based on your needs.
Where do I go to close the loan?
In most cases, you will go to a local Title Company or attorney's office for the closing.
The closing agent will have all your mortgage documents needed for closing. You may need to bring money, picture identification, etc. Your closing agent will let you know what you need to bring.
Can I bring a personal check to the closing?
You will need a cashier's check or certified check for closing. Since this is such a large transaction, a cashier's check provides verification that the funds are actually available.
What is title insurance and why is it required?
Title insurance protects the lender or you against losses from disputes over the title of a property. It ensures against the possibility that there may be an unknown lien or any discrepancies in ownership. You may want to consider purchasing a separate buyer's policy to protect your interests.
How much title insurance do I need?
The amount of title insurance needed is based on the value of your home and the amount of your mortgage. Lenders are covered for the full value of the mortgage. This policy is required and will vary from state to state. There is a one-time fee for the policy that you pay at closing. In addition, you can obtain a separate owner's insurance policy to cover the full value of your home.
How much homeowner's insurance does a lender require?
Your homeowner's insurance policy must cover the cost to rebuild the home. The insured amount may be higher or lower than the actual purchase price as long as it meets the program requirements. The insurance company you choose can give you an actual quote based on specific information about the property.
How do I know if I need flood insurance?
A flood hazard determination is made for your property. If your home is located in a Special Flood Hazard Area, federal law requires you to purchase flood insurance. Most standard homeowner's insurance policies do not cover loss due to flood. If you choose, you can obtain flood insurance coverage even if you are not required to do so by the lender.
How are my property tax bills paid?
It depends on your loan program and state requirements. Generally, if your monthly mortgage payment includes money for property taxes, these funds are held in escrow by the lender and the lender pays your property taxes as they become due. Generally, if your payment does not include property taxes, you are responsible for paying them by the due date mandated by your state.
What type of inspections do I need before I close on my home?
Certain inspections may be required under your particular loan program. However, depending on the home and the location, there are a variety of inspections you may want to consider before you close on your new home even if they are not required under your program, such as:
- Home Inspections
- Termite Inspection
- Water Test (for well water)
- Septic Tank Inspection
- Radon Test
Why might my actual costs be higher (or lower) than the estimated costs?
Final closing costs can differ from an estimate for a variety of reasons including: A special inspection of the property may be required (termite, electrical, plumbing, etc.). A more in-depth property value analysis may be required if the property has unique structure/design aspects or presents other factors that make it difficult to determine the market value. The cost for title insurance in a purchase money transaction (acquiring property by payment of money or equivalent) is usually negotiated. Some small fees (recording, notary, title, etc.) are based on the number of pages in your title/closing documents and can’t be included in an estimate.
How do I pay for my appraisal?
Once you submit your loan application, your loan consultant will contact you to discuss appraisal payment.
Can I borrow more money to cover closing costs?
Yes. Depending on the loan-to-value (LTV) ratio, some lenders allow you to borrow more money to cover your non-recurring closing costs and possibly some of your recurring costs up to 1% of your property’s value.
What’s the difference between non-recurring and recurring costs?
Non-recurring costs are one-time fees associated with closing a loan and include loan fees, appraisal and title fees, taxes and points. Recurring costs are ongoing fees that can include mortgage insurance, property taxes and insurance.
What are points?
A “point” is equal to one percent of the loan amount. Points can be either positive (discount points) or negative (rebate points). The more discount points you choose to pay up-front, the lower your interest rate will be. Or, you can opt for a loan with a higher interest rate in exchange for a rebate, which will give you a credit towards paying some of your non-recurring closing costs, such as title insurance, appraisal and origination fee. You can't get any cash back from rebate points.
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