Closing
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Escrow
An attorney or title
company will conduct the closing and make sure all the preliminary
detail work has been completed in time. These companies are
impartial and objective, hold the down payment, oversee all the
paperwork, and then distribute the money when the terms of the sale
have been met.
Title Insurance
Title insurance is an
aspect of home buying that many people have found confusing. There
are actually two types-lender's and owner's. What title insurance
will do is protect you, the buyer, from any claims that may arise
against the property you're buying. When you have title insurance,
you have a guarantee that once you've bought it, you own it, or the
title company is obligated to compensate you for damages. Most
lenders routinely insist on a title search and require buyers to
purchase title insurance to protect their investment.
Closing Costs
You'll know in advance
what fees you're going to be expected to pay, above and beyond the
down payment. Your loan officer is obligated to provide you a good
faith estimate of these costs at the time of your closing. Costs may
include recording fees, other assorted taxes, legal fees, title
fees, pre-payment of property taxes and homeowners insurance. You
should check every fee in advance, and if there's something you
don't understand or don't think you should have to pay, the time to
question it is before the closing.
Mortgage Insurance
You may see a fee for
mortgage insurance on the list. That doesn't mean that if you lose
your job and are unable to make your payments, the insurance
company's going to send in those monthly checks for you. Mortgage
insurance will only pay the balance of your note if you die or, in
some cases, are permanently disabled. Some lenders are making this
insurance mandatory, especially if your down payment is less than 20
percent.
Final Walk-through
When you know
everything's been completed and the closing is going to take place
as scheduled, you should make an appointment with your agent for a
last-minute inspection of the property. Known as the final
walk-through, it takes place the day before or just before the
closing.
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