Defining closing costs and the role of a title company for home buyers

What are closing costs and why do I need a title companyWhy are there additional closing costs when purchasing a home? Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a home. They are a part of every home buying transaction and include upfront loan points, title insurance, escrow or closing day charges, document fees, prepaid interest and property taxes. Unless, these charges are rolled into the loan, they must be paid when the home is closed.

If closing costs are not rolled into the home loan, which typically isn’t done unless there is some kind of special provision allowing you to finance 100% of your home purchase (like the veteran’s home loan benefit), you still have options for lowering your up-front fees (like closing costs) of purchasing a home.

For instance, did you know you can negotiate your closing costs, or ask the seller to pay for your closing costs? (5 more tips on reducing your closing costs can be found by clicking here.)

Another consideration that is highly encouraged, and sometimes required, is that you include the cost of a title report in your closing costs. Why is this important? A clear title report ensures there are no liens placed against the prior owners or any documents that will restrict your use of the property.

The last thing you want after going through a new home purchase, is a contractor coming up to your door saying he has a lien on the property because of past-due renovation bills by the previous owner. This scenario is actually more common than you think, and a title report can help ensure this doesn’t happen to you.

These are just a few tips you will find on the Ideal Real Estate Group’s website, and you can click here to read more!

Explore posts in the same categories: Buying a Home

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