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9 Steps to a Finding The Best Mortgage for You - Closing

Aug 17, 2007
Closing requires a great deal of paperwork. You should keep your records organized and also ask your lender about documents you might need, though everything should be taken care of regarding your loan at this point. Make sure to ask your lender to send you the Settlement Statement a few days before closing so you have time to review it.

Before signing, review all your loan documents, especially your Settlement Statement, which is also called a HUD-1. (The HUD stands for Housing and Urban Development, the federal agency responsible for the statement.)The settlement statement you receive when you close on a home can be confusing. Understanding the following terms can help.
Upon closing on a house, you will receive a settlement statement. This document itemizes all of the monetary transactions that are involved. However, it's not always easy to understand. Here are definitions of a few of the terms that commonly appear on a settlement statement.
Loan fees

-Loan origination fee: A fee charged by the lender for processing the loan.

-Appraisal fee: The cost of having the property appraised (assessing its market value).

-Credit report: A report of your credit history that a lender uses to determine your creditworthiness. It shows your history of borrowing and repaying money.

-Documentation preparation: The cost of preparing all of the documents for closing.

-Final inspection: The cost for performing a final inspection to make sure all agreed-upon repairs have been completed.

Title Charges

-Title: The cost of the document that proves ownership of the property.

-Notary fee: The fee for having a person, who is licensed as a public notary, verify the signatures on the document.

-Attorney fees: Many states require an attorney to be a part of the closing process. A fee for this service may appear on the settlement statement.

-Title insurance: Protects lenders and property owners against any potential hidden claims against a property.

-Photocopies/facsimile fees: Charges for all of the paperwork.

This is your final account of all of the costs and figures related to the deal. Many of the fees listed in the HUD-1 form also have been included in the Good Faith Estimate (GFE) of mortgage costs that you have already received from your lender; however, the HUD-1 amounts are final.

You may find some of the HUD-1 figures are different from those in your GFE. This could be because third-party fees such as appraisal fees ended up being slightly different than originally estimated. However, if there are large discrepancies, or new fees that weren't in the GFE, check with your lender to see if there's a mistake that needs to be corrected.

Once you sign the loan documentation and write your check for closing costs and your down payment, the home is yours!
About the Author
Chris Navi - I want everyone to be well informed in regards to their mortgage, home buying and property buying situations. My website http://fundinglist.com/guide-to-mortgages/index.php will give you details on each of the steps mentioned in my article.
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