| Closing costs are often the last thing a | | | | to pay points. |
| person thinks of when buying a home. | | | | Home and Title Insurance |
| While closing is the joyous moment the | | | | Insurance for your home and title are a |
| home becomes yours, the costs can be | | | | must. If you are borrowing money to |
| surprisingly aggravating. | | | | purchase the home, each is mandatory. If |
| When you purchase a home, condo or other | | | | you are using your own funds, you should |
| property, you will go through a period | | | | still get both forms of insurance. As |
| known as escrow. During escrow, various | | | | each name implies, they provide |
| issues related to the property transfer | | | | insurance against issues involving your |
| are worked out. The last day of escrow | | | | home and problems with the title |
| is known as the closing day and you are | | | | transferred to you. You want to have |
| going to be paying closing costs. | | | | clear title. |
| Closing costs come in many forms. Some | | | | PMI |
| involve significant dollars while others | | | | Private Mortgage Insurance, "PMI", is |
| are relatively painless. Here's a list | | | | mandatory if your down payment is less |
| of typical costs: | | | | than 20% of the purchase price. You can |
| Escrow Fees | | | | expect to pay a few hundred dollars a |
| An escrow agent is essentially a third | | | | year in PMI. |
| party that works with the seller and | | | | Inspections, Appraisals and |
| buyer to finalize the transaction. For | | | | Miscellaneous Fees |
| this assistance, the escrow agent will | | | | In the home purchase process, you are |
| charge a fee. Depending on your area and | | | | going to use a variety of services to |
| the agent, you can expect fees from a | | | | validate the property is your dream |
| few hundred dollars to around a thousand | | | | home. These services come with fees and |
| or so. Make sure you find out the fees | | | | you can expect to pay for home |
| before picking an escrow agent. | | | | inspectors, appraisers and the like. |
| Home Loan | | | | Depending upon the state you live in, |
| Obtaining a home loan in the current | | | | many of these fees may be built into |
| market is a highly subjective event. | | | | your mortgage. Nonetheless, you need to |
| "Points" can be a major cost associated | | | | know exactly what you must pay for on |
| with home loans. Points are essentially | | | | closing day so you can budget |
| a fee you pay or have build into the | | | | accordingly. |
| loan for the privilege of being allowed | | | | Closing escrow should be one of the |
| to borrow money. A point usually equates | | | | happier days in your life, particularly |
| to 1% of the loan. On a loan of | | | | if it is for your first home. Make sure |
| $300,000, one point would equal $3,000. | | | | you know the costs associated with it so |
| If you have excellent credit, you can | | | | you don't have to spend the day running |
| shop for a loan that doesn't require you | | | | around borrowing money. |