What are Closing Costs?

What are Closing Costs?

Definition: Closing costs are everything outside of the purchase price that a buyer pays to complete a real estate transaction. For a seller, closing costs are all the fees, except liens or encumbrances, that are deducted from the purchase price.

Fees range from those paid to title, escrow or lawyers; documentary transfer tax; city/county transfer or property taxes; credit reports; appraisal; recording or notary fees; real estate commissions; inspections; loan fees such as points and prepaid interest.

Fees that lenders consider “recurring” are those that are paid again and again such as property taxes or property insurance. Non-recurring fees are those that are paid once.

When a home is sold there are a number of closing costs involved. The costs can be paid by the buyer or the seller or both during the closing. Some closing costs can help you reduce your interest rate and others will contribute to the overall cost of the borrowing which is reflected in the Annual Percentage Rate (APR). Read more

Title Insurance Policies–What Are They and Do I Need Them?

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Title Insurance Policies—What Are They and Do I Need Them?

Title insurance in the United States is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. Title insurance is principally a product developed and sold in the United States as a result of the comparative deficiency of the U.S. land records laws. It is meant to protect an owner’s or a lender’s financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. Read more