Of all the steps in buying a home or refinancing a loan, the mortgage closing or settlement probably causes more confusion and uncertainty for the borrower than any other.
A settlement may involve several people, and a variety of documents and fees. Once you understand what is involved, you may find the entire closing process far simpler than you might have imagined. While this brochure focuses on settlements in home purchases, much of the information also will be useful if you are refinancing a mortgage.
Let's start with two important facts:
Fact Number 1
Many buyers may think of settlement as the last step to becoming the legal owners of their new home. But it's a process that begins weeks or even months before, and follows an outline set largely by a buyer's original offer to the seller of the house. That offer becomes the sales contract, once it's signed by the seller, and it covers many of the key elements of the settlement or closing.
Fact Number 2
Practices differ from one locality to another regarding who pays what closing costs. Across the country, however, buyers and sellers are free to negotiate certain fees. In some cases, certain costs can be shifted, it may affect the sale price of the property. In most states, costs can also be cut by shopping around among providers of the settlement services.
The point is this: The more you know about the process, the better your chances are for saving money at settlement time.
