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
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