Closing the Deal

The final step to buying a home is the closing. The closing is the process in which all of the players come together to complete the sale. These players usually include:

• The homebuyer
• The seller of the home
• The closing agent
• The real estate attorneys for the buyers and sellers
• The mortgage lender
• The real estate professional
• A title insurance representative
• An escrow agent

A closing date will be set when your mortgage is approved and you sign a commitment letter. Your closing date should occur before the commitment letter and interest rate lock-in expire. Request that your closing agent give you a HUD-1 Settlement Statement which is a final listing of the costs of the mortgage transaction. It provides the sales price, and down payment, and the total settlement costs required from the buyer and seller.

Closing Agents and Real Estate Attorneys

At the closing, there needs to be someone who coordinates closing-related activities, like recording the closing documents and disbursing funds. If you are responsible for selecting this person, ask for references from your real estate professional or friends and family members who have hired one.

Closings can be handled by real estate brokers, lenders, attorneys for the buyers and sellers, insurance companies or escrow companies. It's important that you understand the closing activities in your area before you go to your closing.

You might also consider hiring a real estate attorney to represent you in the closing transaction if you have the money and you'd feel more comfortable knowing an attorney will represent your interests. Keep in mind that the fees that you pay a personal real estate attorney will not be part of your closing costs so you'll need extra funds to pay for these costs.

Closing costs can include:

• Your first mortgage payment
• Your mortgage application fee
• The loan origination fee
• The mortgage loan processing fee
• A loan assumption fee if you are assuming the seller's mortgage
• Private mortgage insurance if your down payment is less than 20 percent of the mortgage
• The homeowner's insurance premium for the first year
• Escrow account reserves for insurance or property taxes
• Property tax payments
• Any survey or inspection fees
• Legal fees
• Appraisal fee
• Title search fee
• Title insurance premium
• Settlement company fee
• Deed recording fee
• Credit report fee
• Transfer taxes