With the increasing costs of basic necessities such as food and health care, as well as car insurance, fuel, clothing, etc. it is not uncommon for Home Buyers to need financial assistance with the closing costs when purchasing a home. Let's face it - not everyone who can afford a home's monthly payment has $7000 - $8000 for closing costs IN ADDITION to the home's down payment.

To go back a step, closing costs are IN ADDITION to the purchase price and include the following, among other items:

1. Mortgage fees
2. Insurance pre-pays
3. Property tax pre-pays
4. Closing fees
5. Lenders Title Insur
6. County & State recording fees
7. Title endorsements

More often than not, closing costs for a home around $250,000 will be appr. $7500. Savvy Buyers (and their realtors) know that in this market, Sellers are willing to bend over backwards to ensure their home gets sold. Somethimes that includes making Seller concessions to pay all or part of the Buyers closing costs.

If the Buyer is getting an FHA loan, the MAX seller's can "contribute" towards the buyer's closing costs and prepaid items is 6%. Purchase prices can be bumped up to allow make the seller feel less "pain" but all too often appraisals come in lower than expected, which brings everyone back to the negotiating table.

If you are getting a conventional loan, many lenders cap the closing cost assistance to 3%, a significant difference. Most of the time, however, buyers getting conventional loans have ample money for downpayment and their closing costs.

For the Seller, I have heard of some instances where Seller Concessions are tax-deductible. You'll want to check with your tax advisor to see if that applies to you. Helping pay a Buyer's closing costs, whether in full or partially, is a win-win for all parties and is becoming a much more common occurence.

If your a seller, don't automatically shun these offers...they may be EXACTLY what you need.

BUYERS: FREQUESTLY ASKED QUESTIONS

What Does a Title Company Do?

Orchestrates everything leading to the closing, issues title insurance to the
new owner and the lender, conducts the closing and handles post-closing
requirements.

• Works with Seller’s lender to pay off mortgage(s)
• Works with Buyer’s lender to set up new mortgage
• Conducts the closing
• Disperses funds, records deed and mortgage, sends signed loan documents to lender
• Issues the title insurance policy

What Should I do Before Closing?

• Apply for your loan and provide all necessary documents to lender.
• Make arrangements for Homeowner’s Insurance as soon as possible.
• Have the Utilities placed in your name effective the day of closing.
• If you are using a Power of Attorney, have the title company review the document ahead of time. The Lender and Sunbelt Title must approve it before closing. Bring the Original Power of Attorney document to closing.

What Should I Bring to Closing?

• Your spouse if this will be your primary residence.
• A Cashier’s check made payable to Sunbelt Title Agency if you are required to bring funds to closing. State law will not allow personal checks over $500.00 to be accepted. - or -
Wiring instructions can be obtained from Sunbelt Title.
• Government issued photo ID such as Driver’s License, Passport or Military ID and your Social Security Number or Green Card.
• Original Power of Attorney document, if applicable.

What Happens at Closing?

The Closing is the final step toward owning your new home:

• Buyer signs closing and mortgage papers, brings funds and receives keys to property.
• Seller signs closing papers, gives keys to buyer & collects funds from sale of house.
• Title company disperses funds, pays off seller’s mortgage, records new deed and mortgage.
• In about an hour everyone leaves happy.

What is Title Insurance?

• Unlike other insurance which protects what might happen in the future, title insurance protects you from what has happened in the past by searching public records.
• Provides coverage for losses due to defects in the title that occurred prior to your ownership.
• Protects against things such as unpaid taxes & liens, judgments, fraud & forgery or other issues that might go undetected until after closing. These could affect your ownership and investment.

What does Title Insurance Cost?

• Title Insurance is a one-time fee regulated by the State and is paid at Closing.
• The cost varies because it is based on the purchase price of the property.
• In this region, the seller customarily pays for the owner’s policy which protects new owner. The buyer pays for the policy that covers the lender.
• Example: $100,000 purchase price = $575 for the owner’s policy. The lender’s policy is just $25.
• The protection lasts as long as you or your heirs retain an interest in the property.

What Expenses Should I Expect?

• Closing Fee
• Lender’s Policy
• Endorsements to Lender’s Policy, if applicable
• Recording Fee for the Warranty Deed and Mortgage
• Documentary Stamps on the Mortgage
• Intangible Tax on the Mortgage
• Survey, Termite Inspection, Condo Approval Fee, HOA Dues and Transfer Fee, if applicable
• Home Inspection Fee, usually paid at time of inspection
• First Year Homeowner’s Insurance (and Flood Insurance, if applicable)
• Lender Fees. Appraisal and credit report are usually paid at time of application.
• Recording Fee for the Assignment of Mortgage, if applicable