Watch this video to get a quick idea of the sellers side of closing. Also known as settlement and escrow the closing is a meeting where property, money, title and liens are exchanged between all the parties involved. The closing agent typically conducts the meeting. Theyll review the sales agreement to determine payments and credits due from both sides, and ensure that transaction costs like title and taxes are paid. The buyer pays you - usually the remainder of down payment and prepaid taxes. Adjustments like prepaid OR overdue taxes And, of course, commissions for brokers or agents are included. The buyer signs the mortgage note, promising to repay the loan and then signs their lien on the property. The lender pays you. You sign a deed, giving the buyer title to the house Title is recorded by the State,making the buyers the legal owner.

Even though this video simplifies things to help you remember, FHA closing costs are similar to those of a conventional loan, with the exception of an FHA mortgage insurance premium. As of 2013, the FHA requires a single, upfront mortgage insurance premium equal to 2.25% of the mortgage to be paid at the closing (or 1.75% if you complete the HELP program). If the loan is paid off in full within the first seven years, this initial premium may be partially refunded. If your mortgage is longer than 15 years or if you have a 15-year loan with an LTV of more than 90%, you will have to pay an annual premium after closing. This premium is paid monthly.

There are some great tips in this video, like: Call or write to your lender as soon as possible. Clearly explain the situation and be prepared to provide financial information. If you fall behind - Keep living in your home to qualify for assistance. Contact a HUD-approved housing counseling agency and cooperate with the counselor/lender trying to help you. HUD has a number of special loss mitigation programs available to help you: Special Forbearance - your lender will arrange for a revised repayment plan which may include temporary reduction or suspension of payments; you can qualify by having an Involuntary reduction in your Income or Increase In living expenses. Mortgage Modification - allows you to refinance debt and/or extends the term of the your mortgage loan which may reduce your monthly payments; you can qualify if you have recovered from financial problems, but your net income Is less than before the problem. Partial Claim - your lender maybe able to help you obtain an interest-free loan from HUD to bring your mortgage current. Preforeclosure Sale - allows you to sell your property and pay off your mortgage loan to avoid foreclosure. Deed-In-Lieu Of Foreclosure - lets you voluntarily give back your property to the lender it will not save your house but will help you avoid the costs, time, and effort of the foreclosure process. If you are having difficulty with an-uncooperative lender or feel your loan servicer is not providing you with the most effective loss mitigation options call the FHA Loss Mitigation Center for additional help.

Watch this video and take a few notes: seasonal pay child support retirement pension payments unemployment compensation VA benefits military pay Social Security income alimony, and rent paid by family all qualify as income sources. Part-time pay, overtime, and bonus pay also count as long as they are steady. Special savings plans-such as those set up by a church or community association - qualify, too. According to HUD, income type is not as important as income steadiness with the FHA.

Closing and loan consummation costs are not 100% identical in different states, but you can expect most of the following: Fees for Loan Origination — processing and administration of the loan Fees For Recording — official records of ownership. Fees for Survey(s) The first Mortgage Insurance premium, if your loan requires it. To-date Property Taxes Title Insurance fees — yours and the lenders. (See Title Insurance Made Simple on this site.) Points (prepaid interest) Escrow fees and/or attorney fees Document preparation fees First payment to the escrow account for future taxes & insurance If you have not already paid homeowners insurance, that will come up. Likewise, if flood insurance or fire insurance are required, youll need a receipt or payment arrangements. Read things carefully before signing or paying, and keep copies.

"Closing" sounds kind of mysterious - as if big complicated secret events are going to take place. Formally speaking, closing is the final steps of becoming the owner of a property. Those steps frequently overlap with "consummation", which is the process of committing to the financial obligations of buying with a mortgage loan. No mystery or secret, really. Heres the main things that will happen: For most types of home purchases, you will get a Closing Disclosure detailing the loan terms, at least 3 business days prior to consummation (which is frequently the same date as closing.) At the live closing meeting, you should end up with: A copy of your Mortgage Note — the formal document where you commit to pay the loan Your Deed of Trust or Mortgage documents The binding Sales Contract In some states, you might also get the keys to the house; in other states, that physical handover might happen separately. By this time, your real estate and finance professionals should be well acquainted with you and the transaction. Theyve been through this before. Relax, ask questions as you go, and be prepared to sign a few papers! Take the time to read them thoroughly before committing.

If you hear the term "closing day", understand that it refers to a bunch of things that will usually (but not always) happen right at the end of buying a home. Laws and practices vary in different states, but here are some of the common things that might take place on your closing day: Youll receive a formal Closing Disclosure at least 3 business days in advance. Youll provide proof that youve arranged homeowners insurance, such as an insurance binder document or a receipt for the premium. Someone - usually the closing agent - will provide a list and documentation of whats still owed: Down payment remaining Tax prepayment Fees They will also detail any costs owed by the sellers, like: Taxes to be paid Prepaid rent Sellers may also have to provide documentation, like proof of inspection or warranties. Once you are clear on these, you will probably sign the mortgage. The mortgage gives the lender rights to the house; if you dont make the payments, they have rights to recover the loan and interest by selling. You will probably also sign a mortgagenote, which is your promise to repay the loan. You will end up with title to the house, usually in the form of a signed deed. Youll pay all of the closing costs, and receive a settlement statement covering what was paid. The mortgage and the deed will be "recorded" -- literally, put in government records such as a state Registry of Deeds. And now youll be a homeowner. Dont forget the keys!

Books and songs have titles; so do homes! The word "title" has a specific meaning in relation to property; it essentially means valid, provable ownership. If you "hold title" on a home, you own it. Its not as automatic and clear-cut as you might expect, so its worth watching this short video to get the basic idea. If youve ever played a board game where you own properties, houses and hotels...thats a great way to get keep "title" in mind. Imagine what would happen if the game table fell over, and all the pieces and cards were scrambled. Being absolutely sure who owns what, and where the pieces should go, suddenly gets complicated. Fortunately, in the world of real property, government entities act like a neutral party keeping records. In the long run, your home may become one of your biggest assets. You can insure your ownership of the asset with title insurance. Meet Stickman; hell explain title insurance with that board game.

You are likely to hear the term "closing" frequently in buying or selling a home. That short word captures most of the final steps involved in finishing the transaction and financing, and becoming the owner. Many of these steps have costs, so youll hear the term "closing costs" as well. Closing may be a small word, but closing costs can become sizable. Buyers are well advised to understand the cash that will be needed for closing costs as early as possible. Required forms and steps in the mortgage process, such as the Loan Estimate form covered in other videos here, will help you know the range of costs to expect. This short video will help you relate various closing costs and processes to understand them more clearly.

The S crow is kind of a mascot here, because there is no such bird. You wont hear the word "escrow" for years, and then youll hear it all the time if youre buying a home. Heres what the word means. Some of the charges connected to a home: Real estate taxes Mortgage insurance Homeowners insurance are applied annually. The escrow account is a bucket where part of monthly mortgage payments accumulate to pay these costs. Escrow account costs may — and usuallydo — change each year, because these charges change. Its useful to understand that the lender is responsible for making those payments on time, from the escrow account. If somethings late, make sure you are not fined or punished.