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More Information
Purchasing a Home
Saving Money on Mortgage
Federal Laws
Mortgage Do’s and Don’ts
Your Rights
Qualifying for a Mortgage
Choosing the Right Loan for You
Fixed vs. Adjustable Mortgages
Loan Costs
APR, ARM and GPM
Purchasing Agreement
The Closing
Interest Rate Buydowns
Your Buying Power
Mortgage Terminology
 

Closing

All lenders must clearly state closing costs once you submit an application for a mortgage or within three days thereafter. The Real Estate Settlement Procedures Act also requires that borrows be given a detailed lists of costs at least one day before the settlement.

The closing can be a stressful event, but if you understand your rights and clearly read the fine print, you won’t have any difficulties. At the closing, all financial and legal obligations come together; it is at this time that monies change hands and documents are signed. If you are unprepared, you could find yourself signing something you do not want to accept.

Borrowers have little advance time to determine your closing costs. If you are pre-qualified for a mortgage loan, you will have a head start. If you ask your lender, they will be able to provide a close approximation of the cost of closing charges.

Look at the closing costs to determine who is charging you what and why you must pay. These charges can likely be divided into non-negotiable charges like taxes, lender fees that may be negotiable and fees for services that you have control over, like an attorney.

Negotiate with the seller to cover some of the costs of the settlement. For example, if the seller is relocating, many companies reimburse their employees. You may be able to ask the seller to share in some of the costs with you, especially if your move-in date assists his or her situation. If you make a solid offer, you have a better change of negotiating with the seller.

After you have made a list of the fees you will be charged upon closing, begin negotiating on the fees, especially those that are simply there to make profits for the lender.

One of the most frightening occurrences of the closing is when buyers are suddenly told that the lender has chosen to raise the interest rate or changed other loan details in the lender’s favor. At this point, the Federal Truth in Lending Act will be your greatest ally.

This statute has a provision that lets consumers cancel home-secured credit contracts. This clause was designed to help borrows reexamine their credit contracts and prevent the numerous scams that were occurring involving home-improvement companies.