Closing on a home is exciting even for the most seasoned of
buyers. But if you are planning to purchase your first home or even refinance
your current mortgage, you may be wondering what to anticipate in terms of
Buyer vs. Seller
Both the seller and the buyer can expect to pay settlement costs. On average, the cost to close on a piece of real estate ranges from 3 – 6% of the sale price. To provide a better understanding of what makes up the cost to settle on a home, we have listed the associated fees from both the buyer’s and seller’s perspectives.
Buyer Closing Costs:
• Home inspection and appraisal
• Loan origination fee
• Pre-paid interest (discount points)
• Private Mortgage Insurance (PMI)
• Transfer taxes
• Recording fees
• Underwriting fees
• Courier fee
• Title insurance
• Title search and closing fees
• Homeowner’s insurance
Seller Closing Costs:
• Loan pay-off amount
• Real estate commission
• Prorated HOA fees
• Property taxes
• Deed preparation
• Grantor’s tax
• Settlement fee
• Notary Fee
• Termite inspection
• Home warranty
• Home repairs
In some cases, buyers and sellers may negotiate terms to
include seller concessions, where the seller contributes a certain dollar
amount towards closing fees on the buyer’s behalf. The contributable allowance
of seller concessions, however, will vary based on the type of mortgage for
which the buyer is applying.
Have other questions about the closing process? Talk to our
knowledgeable team at Linear Title & Escrow today!
Buying a house is an exciting endeavor. It’s also a significant financial investment. Homeowner’s insurance is an excellent way to protect the structure of your home and cover any damage that may result from fire, certain natural disasters, and other occurrences. But what about intangible threats to your real estate investment, such as improper transfer of ownership due to title defects that surface after you’ve closed on your new home?
Lender’s vs. Owner’s
Owner’s Title Insurance is a type of indemnity policy that
covers your financial interests should title problems be discovered after
settlement. While most lenders require that homebuyers purchase Lender’s Title
Insurance policy to cover their interests if you default on your loan, an
Owner’s policy is completely optional. It is, however, highly recommended.
3 Advantages of
Owner’s Title Insurance
Even when a very thorough title search is performed on a property
prior to your closing, there are still instances in which undetected title
issues arise months, years, and sometimes even decades after the home is
purchased. A wide range of title defects exist, but common examples of such a
situation include undisclosed heirs with an ownership stake who learn of the
property or unpaid back taxes on the property. Having an Owner’s policy in
place can protect the investment you have made in the home and may save you
from a devastating financial loss.
Three key benefits of an Owner’s Title Insurance policy
Fees: Should you need to go to court to defend your rights to the property,
an Owner’s policy will cover your court costs and other legal fees.
Loses: In the event that you lose your home due to defects that occurred
prior to you taking ownership, an Owner’s policy will reimburse your loss up to
your policy amount for covered title defects.
Mind: Knowing you have an insurance policy in place to protect your financial
stake in your home can offer peace in mind in the event another party has a
successful ownership claim against your property.
Protect Your Asset With
Owner’s Title Insurance
Once you purchase an Owner’s policy, its coverage stays in
effect for as long as you own the property – even if you refinance your loan. Keep
in mind, an Owner’s policy does not cover title problems that occur after you
close on the property – only those that affect the property’s ownership before
it came into your possession.
Even with a clear title, the chance for defects to threaten
your rights to your property after closing does still exist. An Owner’s Title
Insurance policy can help protect your investment and the place you call home.
For more information on Owner’s and Lender’s policies, visit our Title Insurance
page or contact us