| Closing costs have a significant impact on the home | | | | to determine that the sellers actually have the legal |
| loan rate that is paid when obtaining a new mortgage | | | | authority to sell the property. There is a fee charged |
| loan. Here are a few of the major closing costs and | | | | by the title company to conduct this search. The clear |
| how they affect the home mortgage rates. | | | | title means that the title company can guarantee the |
| Closing Costs Affecting Home Mortgage Rates | | | | title is correct and that you will have a clear title to the |
| First time home buyers or borrowers are often rather | | | | property in question after closing. The title company |
| unpleasantly surprised at the time of closing or just | | | | actually provides a type of insurance, known as title |
| prior when the good faith estimate of closing costs is | | | | insurance. The cost of the title insurance is one of the |
| received. These closing costs can sometime add a | | | | closing costs built into the home mortgage rates. |
| significant cost to the dollar amount that the borrower | | | | Origination fees |
| is expected to provide to clear the escrow account at | | | | Another factor in the home loan rate is that of |
| the time of closing or shortly thereafter. The home loan | | | | origination fees. These are costs associated with the |
| rate is not directly tied to each of the closing costs, but | | | | work the lender or broker does in opening an |
| indirectly, you will pay the closing costs. You should | | | | application file and working to collect and pass on all |
| make sure you realize and understand each of these | | | | the necessary documentation required to complete the |
| costs and how they impact your total cost of the loan. | | | | loan according to the contract. These fees can be |
| Definitions | | | | sizable or modest, depending upon the broker, but in |
| 'Closing costs' is just one of the definitions that you | | | | most cases are negotiable also that fact is not |
| should understand when considering obtaining a home | | | | commonly known. |
| loan. The 'home loan rate' is another. Closing costs are | | | | Points |
| expenses related to the obtaining of the loan, such as | | | | The borrower may be required to pay 'points' as part |
| document preparation, title search, appraisals, and | | | | of the loan fees. There are two types of points that |
| various other expenses. These costs are typically | | | | you may be asked to cover. Origination points are the |
| listed as part of the closing process on the loan. The | | | | fees you pay your broker or lender to secure the loan |
| closing of the mortgage at the title company or with | | | | while discount points are essentially interest that you |
| the loan officer will spell out each of these costs and | | | | prepay in order to manage the best interest rates on |
| who is responsible for payment of the cost at closing. | | | | your loan. Both types of points are usually paid at the |
| Title search | | | | home of closing. Payment of the discount points can |
| One of the responsibilities that must be met is a | | | | significantly lower your home mortgage rates meaning |
| search by a title company of court records to insure | | | | thousands of dollars less in cost over the life of the |
| that the ownership or title to the home in question is | | | | loan. |
| clear. They will be looking at sales and deed records | | | | |