Prior to Closing

LOAN APPLICATION FEE:

At the time of loan application you will be paying for your credit report. The standard amount for this is around $50. You are not refunded this money should you not become approved with this lender.

EARNEST MONEY:

When making an offer on a house you will need to include a deposit. This check will be made out to the listing company and will only be cashed if your offer is accepted. It will then be placed in a non-interest earning trust account and held until closing. At closing it will show up on the HUD-1 settlement statement as a credit to you.

The intent of an earnest money check is twofold. It protects the seller from a qualified buyer who decides to back out. If you choose not to close on a house just because you don’t like it anymore; the seller is entitled to all of your earnest money. This seldom happens. Before we write an offer, we will make sure that it is the right house for you. The second purpose of earnest money is to show real intent. A rule of thumb is one to two percent of sale price, but this can vary. A good earnest money check could be the deciding factor if someone else is making an offer on the same house.

APPRAISAL FEE:

This fee is paid to an appraiser who then inspects the home for the lender. The cost typically is near $500. This money is also non-refundable.

BUYER INSPECTION:

This is an optional expense of about $400. A buyer can purchase a property contingent on a home inspection. An inspector is selected to examine the home for quality, safety, and possible repair items. The inspector represents you and selecting one is your responsibility. We always suggest that a Buyer’s inspection be done, especially for first time buyers.

HOME OWNER’S INSURANCE:

You will buy a one-year home owner’s insurance policy prior to closing. You must bring the paid receipt to closing. Contact your insurance agent and give them my number. We will relay all of the information about the house to them. The cost is dependent upon the size and price of your new home. There are some important questions to ask regarding the coverage of this policy. Remind us to discuss this topic with you.