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12 Holiday tips for a smoother home closing – The Destin Log

1. Ask the lender for a Good Faith Estimate of all closing costs and fees.
2. Identify which fees are the lenders and which are contracted for or sourced from another vendor
3. Understand the different types of fees and which ones you can control.
   • Loan or Lender Fees: These fees are charged by the lender for services they perform for you. Most are paid by the borrower, in purchase transactions certain fees may be paid by the seller. Coming on lender fees include ‘points’, application fees, and underwriting fees.
   • Title Fees: Title search, title insurance premiums, and related fees are usually payable to a third party title company. Although the bank can give you a quote, many lenders have title affiliates you can shop around for the best service. You can even shop for your own title company.
   • Prepaid Fees: Lenders will usually require initial Hazard Insurance Premium and the expense of odd days Interest paid at closing.
   • Impound/Escrow Accounts: These are deposits to establish escrow accounts to pay taxes and insurance that the lender will include in your Mortgage Payment. Since taxes and insurance come due a few times a year it is necessary to build a few months cushion into the escrow account. In refinance transactions the lender being paid off will refund the existing balance in the escrow account a few weeks after closing (rather than deducting from the payoff amount).
4. Try to schedule a pre-closing review for all documents and fees prior to closing. This avoids the rush at closing and misunderstandings that may arise. It will allow you to review all documents and come up with any questions you may have in advance.
5. Confirm if you are expected to bring funds to closing, and if certified funds will be required by law.
6. Try to close between the 15th-20th of the month. This will help minimize pre-paid interest (paid through the end of the month) but allows the lender as well as all parties involved more time before the end of the month rush when errors can occur.
7. Schedule a closing for the time of day or night when you’re not rushed and have time to ask questions and review the documents being signed. It’s important to think clearly and ask questions during the closing. Your lender should be accommodating with time and location options for your closing.
8. When refinancing, be sure to review your payoff letter for any mortgages for the last payment date and any escrows that your existing lender is holding for you.
9. Confirm with the settlement or closing agent when and how your loan will fund and what to expect. Discuss how any proceeds will be distributed. Do not let a large check get misdirected.
10. When refinancing, never try to avoid or time your last mortgage payment down to the wire. This can cause late payments, resulting in significant penalties and even negative ratings on your credit report.
11. A big source of frustration for consumers purchasing or refinancing is when a paid mortgage still shows as open in public records. If you are selling a home and purchasing another one, you will not be able to close your loan. Check with your bank to make sure the mortgage on the house you are selling will be paid in full as of the closing date.
12. Understand you have the ability to purchase your own title insurance. If you believe your closing costs are high, you can shop for the best rates. Some new Internet companies can actually offer dramatically lower title service fees because of their access to technology.
    
    One caveat issued by myClosingSPACE.com is to be aware that all title insurance premiums are government regulated.
    
    They should be the same regardless of which title company you choose. It is the hidden fees and markups for services that can vary widely between companies. Look for a title company that charges a low, flat fee for its services.
    
    A smoother and more efficient closing process will have more time and money to spend on all the holiday gifts on your list.
    
    myClosingSPACE.com is the first company to market title insurance and closing services directly online. Currently its services are available to New Jersey, New York, and Florida consumers. The company expects to be national within two years.