closing - Dargan Real Estate - Myrtle Beach, SC

Homebuyers are often shocked to learn the number of costs included with the closing of a loan. The bulk of mortgage closing costs are related to third party charges accrued by the lender and passed on to the borrower. Because all fees (mortgage fees included) are settled at the closing table, they are all referred to as closing costs.

On average, closing costs account for 2-5% of the home’s sale price (this percentage can vary drastically depending on the circumstances) and usually include the following:

Obtaining a credit report
Evaluation of the property to be purchased and the borrower
Title search and title insurance
Loan origination fees (the processing of paperwork)
Home inspections and appraisals
Escrow deposit
Documenting the transaction in city/county records

The homebuyer almost always pays the majority of closing costs. Sometimes lenders will advertise mortgage loans without closing fees, but buyers should be leery of such advertisements. If a bank is offering a loan without fees, borrowers should be aware that fees are likely included in the structure of the mortgage.

It’s important for buyers to be aware of the amount of closing costs they will be expected to pay because it affects the amount needed to purchase the home. Lenders are required by the federal government to provide an estimate (Good Faith Estimate or GFE) of the closing costs once the homebuyer applies for a loan. GFE laws state that the final settlement cannot deviate from the estimate given by more than 105% (or not at all on certain loan products).

One tip on how to determine the individual costs from the sum total of the closing cost is to have your lender add up the lender costs (which are the costs he/she estimates on page 2 of the GFE form), as well as provide you with the loan interest rate for which you are qualified. This is a great way to determine which lender is offering the best deal.

For example: If Lender A estimates their lender costs will be $5000 for a 45-day loan lock at 3%, find out how much Lender B estimates for a 45-day loan lock at 3% for your specific credit profile and compare the two estimates.

To read more about mortgage lending and the new regulations that will take effect on January 1, 2014, consumerfinance.gov is a great resource.

Over the past few months, you’ve searched high and low for the perfect place to create a new life for your family. Now that your search is over and an offer has been accepted, you’re giddy with excitement as you approach the closing date. However, there’s still one very important thing to complete: the final walk-through.

The walk-through process can take place anywhere from several hours to several days before closing. It’s important to take the necessary time to perform a thorough walk-through to ensure the home is in the condition it was promised. If you spot something worrisome, talk to your agent about it as soon as possible. He or she will strive to quickly resolve the issue to avoid a potential delay in closing.

If the property is still occupied by the current owner at the time of the walk-through, it might benefit you to ask them to be present. This would be a great opportunity to ask about any improvements they’ve wanted to make to the property. It’s also a good idea (as well as a kind gesture) to ask the seller for their forwarding address to route any stray mail.

We created a checklist to use as a guide during the walk-through process. Some items on the list may not apply to your specific property and there may also be others you should consider that aren’t mentioned.

To avoid overlooking a potential issue… walk into each room and ask yourself the following question: “Is there anything that could pose a potential risk, decrease the value of the home, or cause me to lose a significant amount of money should it need to be repaired soon after I close?”

Final Walk-through Checklist	Completed
Flip each light fixture on and off.
Run the water in each sink. Are there signs of a leak?
Do all appliances work properly (stove, oven, washer, dryer, microwave)?
Do the toilets flush efficiently?
Does the garbage disposal work properly?
Do the exhaust fans run quietly and smoothly?
Test the garage door opener. Does it work?
Is there damage to the walls or floors from the previous owner’s move?
Test the heating and air conditioning. Are they heating and cooling?
Open and close all windows. Do they open and close easily?
Latch and unlatch windows. Do they latch and unlatch easily?
Check for condensation in double-paned windows.
Do the doorbells, alarms, and intercoms work properly?
Does the shower drain properly and efficiently?
Are the plate covers on all light switches?
Check outdoor features (play equipment, pool, hoses, hot tub, sauna, sprinkler system).
Is there a pest control issue that needs to be accessed?
Is the property clean and devoid of debris?
Is the attic and/or basement cleared out and clean?
Did the previous owner leave behind warranties or manuals that may be needed?
Did you previously request any repair work? If so, has it been completed?

The final walk-through is now complete and any issues found have been resolved. You’ve covered all of your bases and should feel confident about the quality of your new home. Go ahead and breathe a huge sigh of relief. YOU’VE EARNED IT!