Closing is the last step in the home-buying process. Closing happens in a meeting between a combination of the buyer, the buyer's , the seller, the seller's and a closing agent. The closing agent is either an attorney or a representative from the title company which manages the home's ownership paperwork.
Both the buyer and seller may pay closing fees. As part of your mortgage application you will get a Good Faith Estimate showing your potential closing costs. Some closing costs on a house can be rolled into the mortgage loan. Costs can include:
Through the course of the closing, several documents are reviewed and signed. Once all of the costs due at closing have been paid and the paperwork has been signed, you can collect your keys - and get ready to move into your new house.
Closing costs are typically two to five percent of the purchase price. However, they can vary depending on your lender, location and property. Since your closing costs depend on your purchase price, they're an important consideration when working with your real estate agent to decide how much to offer on a house.
As part of the mortgage application process you will get a Good Faith Estimate, or GFE, showing your potential closing costs. An itemized list of closing costs must be provided to you within three business days of your mortgage application by law. Your final closing costs should reasonably reflect your Good Faith Estimate. Your lender will also provide you with a HUD-1 settlement statement outlining your closing costs within a day of your closing.
Many factors go into determining how long the closing process is likely to take - it depends primarily on your lender. You should receive an estimated closing date on your purchase agreement. The type of mortgage loan can also impact how long it takes to close on a house. FHA loans typically take a little longer than conventional loans. It's important to check in with your real estate agent to get regular updates throughout the course of the process.
Although both the buyer and seller typically pay closing costs, in certain situations you can negotiate to have the seller pay a portion or even all of your closing costs.
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