Shopping for a home loan is like shopping for any other large purchase. You can save money if you take some time to look around for the best price. Different lenders can offer different loan programs, interest rates and loan fees and, as a lower interest rate can make a big difference in how much home you can afford. Most lenders need three to six weeks for the whole loan approval process, so if you have a closing deadline, you will want to make sure your lender can meet it.
Closing costs can add thousands of dollars to the cost of a home, so it'sessential to know what to expect. RESPA stands for Real Estate. Settlement Procedures Act, which requires lenders to disclose information to potential customers throughout the mortgage process. Lending institutions must fully inform borrowers about all closing costs, lender servicing and escrow accounts practices, and business relationships between closing service providers and other parties to the transaction. For more information on RESPA, visit the U.S. Dept. of Housing and Urban Development's Web site and search on the term "RESPA".
Under RESPA, a lender must give you a good faith estimate that lists all fees to be paid before closing, such as loan origination fees, prepaid items such as mortgage interest, escrow items to be deposited, title charges, recording fees, and any miscellaneous settlement charges such as express mail charges, and any escrow costs you will encounter when purchasing a home.
Another aspect of real estate closings is the creation of a public record of the sale. Any time a piece of real estate is sold, certain records derived as a result of the real estate closings are entered into public record. Transfer of title and deed get recorded at the county clerk's. Usually a "recording fee" is included in closing costs. This is the fee charged by the closing company to record the real estate transfer with the county clerk or registrar. This fee is charged to the closing company by the registrar. You will receive a copy of the public record at closing. Should you need additional copies of these records, you will usually need to pay the county clerk or registrar for them.
Timing on closing can vary widely. Depending on the specific circumstances of the sellers and buyers, as well as the general load on the mortgage and closing companies, it usually takes anywhere from three to eight weeks before closing on a home. In that time, you'll have a home inspection conducted, the mortgage lender will process your application, and the closing company will prepare all the closing documents, including list of the real estate closing costs, which generally cannot be calculated until just before the actual closing. Review all documents for mistakes before signing any closing paperwork.
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