Closing on a home should be the most exciting part. After all, this is when you actually get handed the keys and you can call yourself a homeowner. To many, however, closing can be confusing and a little intimidating, if you don’t know what to expect. We’ll break it down for you here.
What is Closing?
The Consumer Financial Protection Bureau (CFPB) defines it very simply: “The ‘closing’ is the last step in buying and financing a home.” That sounds pretty straightforward, but notice there are two parts; the buying and the financing. This means the closing involves a few parties. The main players are usually the buyer and the seller, the lender and the title company. During the closing, the bank or mortgage lender pays the seller for the house, you agree to pay the lender back by making mortgage payments and the seller signs over the deed to the buyer, at which point they become the homeowner.
What Are Closing Costs?
Closing costs are any fees paid at the closing, either by the buyer or the seller. According to Zillow’s blog, this can include things like fees for inspections, appraisals, credit checks and origination fees for processing loan paperwork. On average, these fees add up to about 2 to 5 percent of the cost of the home. You should receive a good faith estimate from your lender within 3 days of applying for a mortgage.
Know what to expect when closing on your home. Talk to your lender about your options. You can also download this checklist from the CFPB to make sure you don’t miss any details.
Contact Golden State Mortgage today to talk to a mortgage lending expert.