What Makes up Closing Costs?

There may be closing costs customary or unique to a certain locality, but closing cost are usually made up of the following:

Attorney’s or escrow fees (Yours and your lender’s if applicable)

Property taxes (to cover tax period to date)
Interest (paid from date of closing to 30 days before first monthly payment)
Loan origination Fee (covers lenders administrative cost)
Recording Fees
Survey Fee
First premium of mortgage insurance (if applicable)
Title insurance (yours and lender’s)
Loan discount points’
First payment to escrow account for future real estate taxes and insurance
Paid receipt for homeowner’s insurance policy (and fire and flood insurance if applicable
Any documentation preparation fees

What can I expect to Happen on Closing Day?

You’ll present you paid homeowner’s insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable.) The seller will provide proofs of any inspection, warranties, etc.

Once, you’re sure you understand all documentation, you’ll sign the mortgage, agreeing that if you don’t make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You’ll also sign a mortgage note, promising to repay the loan. The seller will give you the title of the house in the form of a signed deed.

You’ll pay the lender’s agent all closing costs and, in turn, he or she will provide you with a settlement statement of all items for which you have paid. The deed and mortgage will then be recorded in the State Registry of Deeds, and you will be a homeowner.

What do I get at Closing?

Settlement Statement, HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing)