The closing process is one of the most worrisome for home buyers. The problem is not so much about what you'll have to do, but what you don't know. If you are a first-time home buyer, the closing process can seem like a daunting one, with many papers to sign and many concerns to consider. When you have a trusted closing specialist by your side, the process can be less stressful for you. Nevertheless, it is critical for individuals who are about to step into this stage of the home buying process to fully understand what it means and what to expect.
What Are the Closing Costs?
A key component of the process is the closing costs. This is a term you'll hear from the day you apply for your mortgage until you get it underway. This is a term that applies to all of the fees and taxes you'll pay for the sale of the property. In most cases, closing costs amount to between two and six percent of the home's sale price. You will need to pay these costs at the time of closing, which occurs after all home inspections and loan verifications are complete.
In some situations closing costs are folded into the mortgage loan. This can be more expensive, since you will then be paying interest on it; but if you do not have that type of money in your checking account, this may be the best option. Also note that sellers can pay some of these fees, if you negotiate that into the sales contract. However, you'll want to make sure you've considered what these steps will mean to your loan.
What Happens at Closing?
During the closing process, you will sit down with a closing specialist. The closing agent will go through a large number of papers with you, explaining them to you. You'll agree to the terms and sign the documents. Be sure to ask any questions you do have. Once this is complete, and the seller signs all documents, the lender verifies the process, transfers the funds to the seller, and the deal is closed.
The closing process can seem challenging, but it is merely the process of completing the deal. Be sure you have the right mortgage lender by your side to ensure the right loan and you'll have no problems through this process in most cases.
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