Buying Your Home - Escrow & Closing Costs
How can I save on closing costs?
Studies show that the closing
costs, which can average 2 to 3 percent of a total home purchase price, are
often more costly than many buyers expect. But there are some ways to save:
* Rent the property in which
you are interested with an option to buy. That will give you more time to save
for the upfront cash needed for the actual purchase.
* Shop around for the
best loan deal. Each direct lender and each mortgage brokerage has their own fee
structure. Call around before submitting your final loan
Who pays the closing costs?
Seller and buyer are each responsible for their own legal costs.
What are closing
Closing costs are the fees for services, taxes or special interest
charges that surround the purchase of a home. They include upfront loan points,
title insurance, escrow or closing day charges, document fees, prepaid interest
and property taxes. Unless, these charges are rolled into the loan, they must be
paid when the home is closed.
Why do I need a title report?
As much as you as a
buyer may want to believe that the home you have found is perfect, a clear title
report ensures there are no liens placed against the prior owners or any
documents that will restrict your use of the property. A preliminary title
report provides you with an opportunity to review any impediment that would
prevent clear title from passing to you. When reading a preliminary report, it
is important to check the extent of your ownership rights or interest. The most
common form of interest is "fee simple" or "fee," which is the highest type of
interest an owner can have in land. Liens, restrictions and interests of others
excluded from title coverage will be listed numerically as exceptions in the
report. You also may have to consider interests of any third parties, such as
easements granted by prior owners that limit use of the property. Some buyers
attempt to clear these unwanted items prior to purchase. A list of standard
exceptions and exclusions not covered by the title insurance policy may be
attached. This section includes items the buyer may want to investigate further,
such as any laws governing building and