DESCRIPTION

This fee covers the lender’s administrative cost in connection with the loan.

A one-time charge used to adjust the yield on the loan to market conditions.

A fee for a statement of property value made by an independent appraiser.

A report obtained from a credit reporting agency detailing the borrower’s credit history

Fee charged by the Veterans Administration on all VA loans.

Collected on the loan from date of closing for the balance of the month when closed(except when the closing takes place on the 1st day of the month). Interest rate x theloan amount divided by 365 = factor x number of days remaining in month = interiminterest.

Generally required on mortgages with a loan-to-value ratio of 80% and up. Somelenders require the entire premium paid at closing while others require a percentage atclosing with monthly payments escrowed. Mortgage insurance protects the lenderfrom loss due to payment default. Mortgage insurance can allow borrower to obtainup to 95% financing.

Lenders require a fire (and extended coverage) policy covering at least the amount ofthe mortgage. If the property is in a flood prone area, flood insurance is mandatory.

Funds held in an account by the lender to assure future payment for such recurringitems as real estate taxes, hazard insurance and mortgage insurance.

The closing is normally handled by the Buyer’s attorney. The attorney is responsibleforobtaining title insurance, handling and computing the closing statement (including allprorations and adjustments) and recording pertinent documents. The deed is normallyprepared by an attorney selected by the Seller. However, the Seller often chooses touse the Buyer’s closing attorney for preparation of the deed.

Protects against loss due to problems or defects in the title which cannot be found oraren’t found on public record. This insurance is required by the Lenders and the costis borne by the Buyer. It is a one-time fee payable at closing. Both lenders’ and own-ers’ policies are available. Although not necessarily required by the lender, an owners’policy is strongly advised.

Recording fees for deed, deed of trust, and any and all other documents.

A survey is required to show the exact locations of the house and the lot line, alongwith easements, buffers and setback lines.

Mortgage insurance required by HUD. May be paid at closing or financed with loanamount.

Transfer taxes in N.C. are computed on the selling price and are paid by the Seller.

The Buyer’s option to have a home inspection per Provision 12.

A report from a N.C. licensed pest control operator stating as to the evidence of wood-destroying insects and resulting damage.

Each office independently owned and operated.

ITEM

Loan Origination Fee

Discount Points

Appraisal Fee

Credit Report

Funding Fee

Interim Interest

Private MortgageInsurance (PMI)

Hazard Insurance

Escrow Deposits

Attorney Fee

Title Insurance

Recording Fees

Survey

FHA Mortgage Insurance

Transfer Taxes

Home Inspection

Termite Inspection

AVERAGE COST

1% of loan amount

Each point equals 1% of loan amount

$300-$500 conventional loan; $300 VAloan; $300 FHA loan

$50 - $75

2% of loan amount if veteran pays nodown payment; 11/2% if 5% down pay-ment; 11/4% if 10% down payment; 3% ifveteran has used VA prior funding, notputting down minimum of 5%

Premiums vary with coverage.

First year premium is paid at closing

2 months hazard insurance;2 months mortgage insurance;5 months taxes (average)

$450-$600

$2 per $1,000 of coverage

$35

$200-$300

.0225 x loan amount(if financed)

$2.00 per $1,000

$200 - $450

$75

T Y P I C A L C L O S I N G C O S T S

A General OverviewA. The Agreement• An “Offer to Purchase and Contract” is complet-

ed with a sales associate’s assistance, signed bythe Buyer and is accompanied by an earnestmoney deposit of usually 3-5% of the purchaseprice. When the offer is accepted, these fundsare placed in a non-interest bearing account bythe listing broker until closing. Then the earnestmoney is credited to the Buyer on the closingstatement.

• Usual contingencies in the contract: obtaininga mortgage commitment, termite inspection,component inspections.

• The Seller agrees to convey the property byGeneral Warranty Deed.

• The average time to closing (Transfer of Title) is30-60 days.

• The Contract is accepted and signed by the Seller.

B. Mortgage• The Buyer submits a mortgage application to a

mortgage company, or other lending institution.

• The Lender orders a credit report, and if satisfac-tory, orders an appraisal of the property.

• Having verified the Buyer’s employment,the Lender approves the Buyer’s credit and

the value of the property as collateralfor the loan.

• The Lender approves the mortgage applicationand sends documentation to the Buyer’s attorneyfor closing.

• The Lender orders mortgage insurance ifmortgage insurance is necessary.

C. Closing (Transfer of Title)• The Buyer’s attorney orders title insurance and

begins computation of closing statement andpreparation of other necessary documentation.

• Utility companies need to be notified when titletransfers so the appropriate parties can be billed.

• Closing is normally held at the office of theBuyer’s attorney.

• The usual closing costs include: loan origi-nation fee (1% of the loan amount), discountpoints, if applicable, private mortgage insur-ance if the loan is greater than 80% loan tovalue, title examination and insurance, haz-ard insurance, credit report, survey, record-ing fees, and appraisal.

• The closing attorney completes the finalstatement, and records the documents at theCounty Courthouse.

• The Buyer (or Buyers, i.e. husband and wife)takes title as “Tenant by the Entirety.”

• The Buyer typically takes possession imme-diately after the closing.

Guide to Buying Your Home

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A. The Agreement• Lawyers: Buyers and Sellers are not required by law to have an

attorney represent them in the transaction, but it is commonpractice in North Carolina for Buyers to retain legal counsel,while Sellers usually do not.

• Purchase and Sale (Final) Agreement: The instrument that cre-ates a valid, enforceable contract between the Buyer and theSeller is commonly entitled “Offer to Purchase and Contract.”The “Offer To Purchase and Contract” is a somewhat modifiedNorth Carolina Bar Contract and major firms in the marketarea use this or a similar instrument. The practices (or provi-sions) described on the following pages are based on the “Offerto Purchase and Contract.” The form is preprinted, and maybe completed with assistance from a sales associate.

• Customary Deposit (Earnest Money): The earnest moneydeposit that accompanies the sales contract is usually 3-5% ofthe purchase price. The deposit check is made payable to thelisting broker who places it in a non-interest bearing accountuntil closing.

• Contingencies (Customary or Acceptable): The following contin-gency clauses are customarily included in the sales contract:

• Typically, the Buyer is given six (6) weeks in which toobtain a firm loan commitment. The principal amount ofthe loan, the term (in years) and the maximum interest rateare noted in the contract, together with the maximumnumber of mortgage loan discount points.

• Termite Inspection: Under the provisions of the contract, theBuyer has the right (at his or her expense) to obtain aninspection for termites, wood-destroying insects and organ-isms, and structural damage on Standard Form No. 1 inaccordance with the regulations of the North CarolinaStructural Pest Control Committee. If new construction,the builder will typically provide a new construction ter-mite bond. Extermination and/or repairs (if necessary) areat the Seller’s expense.

• Component Inspections: The Buyer has the option to have(at his or her expense) an inspection of the electrical,plumbing, heating and cooling systems, and the built-inappliances. The Buyer also has the option to have roof andstructural components of the property inspected. Any nec-essary repairs are at the Seller’s expense. If the Seller doesnot elect to complete the repairs, the Buyer may rescind thecontract.

Note: Occasionally, the sale of the Buyer’s present home is a con-tingency. In this case the Seller’s home is usually kept on the mar-ket during this period. The Buyer is sometimes given a short peri-od of time to negate the contingency in the event a new, bona fideBuyer makes a second offer.

•Restrictions: Recorded liens, encumbrances, easements andrestrictions are referenced in the contract.

• Fixtures/Personal Property: The “Offer to Purchase andContract” contains a standard list of fixtures normally includedin the sale. It is important to list any personal property that isexpected as part of the sale. If there is a negotiated sale of per-sonal property (as opposed to fixtures), this may be describedin the contract or become a matter of a separate agreement.

• Adjustments: Adjustments (and prorations) are described in the“Offer to Purchase and Contract” as follows:

“Unless otherwise provided, the following items shall be prorated and either adjusted between the parties or paid at Closing:

• Ad valorem taxes on real property shall be prorated on acalendar year basis to the date of closing.

• Ad valorem taxes on personal property for the entire yearshall be paid by the Seller; unless the personal property isconveyed to the Buyer, in which case, the personal proper-ty taxes shall be prorated on a calendar year basis throughthe date of Closing.

• All late listing penalties, if any, shall be paid by the Seller.

• Rents, if any, for the property shall be prorated to the dateof closing.

• Owners association dues and other like charges shall beprorated through the date of Closing.

• Accrued, but unpaid, interest and other charges to theSeller, if any, shall be computed to the date of closing andpaid by the Seller; interest and other charges pre-paid bythe Seller shall be credited to the Seller at closing and paidby the Buyer. (Other charges may include FHA mortgageinsurance premiums, private mortgage insurance premi-ums and Homeowner’s Association dues.)”

• Type of Deed: Property in our North Carolina market area iscustomarily conveyed by a General Warranty Deed at closing.Foreclosed properties are typically conveyed by SpecialWarranty Deed.

• Buyer Default/Extension to Perfect Title: In accordance with theEarnest Money provisions of the contract, should the Buyerbreach the contract, the deposit is forfeited but this action doesnot affect any other remedies available to the Seller for breach.It is customary for the Seller to be automatically granted anextension for a reasonable time to perfect any flaw found inthe Seller’s title.

• Time-Agreement of Closing: The average time from the execu-tion of the sales contract to closing (Transfer of Title) is 30-60days.

B. Obtaining a Mortgage• Sources of Mortgages: Most Buyers obtain their mortgages from

mortgage companies, credit unions, and in some cases privatefinancing. FHA/VA mortgages constitute a relatively small pro-portion of local loan activity.

• Discount Points: Discount points are sometimes a factor inobtaining a loan. Each discount point equals 1% of the loanamount.

• Other Lender Requirements: Special Fees. Customarily, lendersrequire the following:

• Loan Origination Fee: 1% of the new mortgage loan

• New Plot Plan (Survey): $200-$300 (required if new loan)

• Appraisal Fee: $300-$500

• Credit Report Fee: $50-$75

• Title Insurance: $2.00/per thousand (unless the attorneycan get a “re-issue” rate)

• Termite Inspection: $75

• Basic Terms of Mortgage: Mortgages written in this market gen-erally do not contain a prepayment penalty clause. They do,however, contain an alienation (or “Due on Sale”) clause thatprohibits assumption of the existing mortgage without thelender’s prior approval. VA loans are typically an exception.FHA loans written prior to December 1986 are also excep-tions.

• Procedure: After the Buyer applies for a mortgage com-mit-ment, the lender orders a credit report and an appraisal of theproperty. Verification of employment is generally required as isverification of down payment and other financial resources.

• Definition of Key Mortgage Instruments: The instrument that isevidence of the debt incurred is called a “Promissory Note,”while the security for the note is called a “Deed of Trust.”

• Expediting the Application: In making a mortgage application,the Buyer can expedite the process by having all verificationdocuments readily available. Included are a complete financialstatement (assets and liabilities), credit references, bank andcredit card account numbers and current balances plus anyother relevant material.

• Mortgage Assumptions and Second Mortgages: Assumptions areallowed in this market occasionally, and Sellers grant secondmortgages sometimes. VA loans are typically assumable at theoriginal rate. Conventional loans of less than 10 years are gen-erally assumable only with the permission of the lender andthen at the current interest rate. FHA loans written afterDecember 1986 may be assumable subject to the Buyer’s abili-ty to meet the lender’s qualifying guidelines.

• Bridge Loans: In general, commercial banks make interim(bridge) loans to Buyers whose present home has not sold, orif under contract, has not closed. However, some mortgagelenders will not approve a borrower’s credit until the Buyer’shome has actually been closed.

• Special Seller Financing: During periods of “tight money,” sellerfinancing is occasionally available. Seller financing is not fre-quently seen in this marketplace.

C. Closing (Transfer of Title)• Lawyers: The Buyers are customarily represented by an

attorney at closing, but the Sellers usually do not retain legalcounsel.

• Title: The Buyer (or Buyers, i.e. husband and wife) usuallytakes title as “Tenant by the Entirety.”

• Special Power of Attorney: In the absence of the Seller, the list-ing or selling broker can represent him (or her) through a spe-cial Power of Attorney that names the real estate firm ratherthan a specific individual within the firm. In the case of aPower of Attorney for the Seller, it is necessary for the Seller toexecute a deed as part of this Power of Attorney. The Buyer’sname must be included in the deed and the document mustbe notarized.

• Location of Closing and Recording: The closing is usually held inthe office of the Buyer’s attorney. Pertinent documents arerecorded at the County Courthouse.

• Closing Costs: At closing, the Buyer pays with a certified check,the balance due on the purchase price (the price less thedeposit and new mortgage loan) plus all other closing costs.Customarily, Buyers in this market area receive an estimate ofclosing costs prior to the actual closing. (See chart on backpage).

• Utilities: The parties involved notify the utility companies (gas,electric, water, and phone) to change billing from the Seller tothe Buyer, effective as date of closing or occupancy.

• Pre-Conveyance Inspection: The Buyer has the right to walkthrough the property just prior to closing to check on the con-dition of the house. Closing constitutes acceptance of theproperty.

• Possession: It is customary for the Buyer to take possessionimmediately after closing unless other arrangements have beenmade and put in writing. Recordation of the deed constitutesclosing.

Details of the Steps in the Purchase of Property

A. The Agreement• Lawyers: Buyers and Sellers are not required by law to have an

attorney represent them in the transaction, but it is commonpractice in North Carolina for Buyers to retain legal counsel,while Sellers usually do not.

• Purchase and Sale (Final) Agreement: The instrument that cre-ates a valid, enforceable contract between the Buyer and theSeller is commonly entitled “Offer to Purchase and Contract.”The “Offer To Purchase and Contract” is a somewhat modifiedNorth Carolina Bar Contract and major firms in the marketarea use this or a similar instrument. The practices (or provi-sions) described on the following pages are based on the “Offerto Purchase and Contract.” The form is preprinted, and maybe completed with assistance from a sales associate.

• Customary Deposit (Earnest Money): The earnest moneydeposit that accompanies the sales contract is usually 3-5% ofthe purchase price. The deposit check is made payable to thelisting broker who places it in a non-interest bearing accountuntil closing.

• Contingencies (Customary or Acceptable): The following contin-gency clauses are customarily included in the sales contract:

• Typically, the Buyer is given six (6) weeks in which toobtain a firm loan commitment. The principal amount ofthe loan, the term (in years) and the maximum interest rateare noted in the contract, together with the maximumnumber of mortgage loan discount points.

• Termite Inspection: Under the provisions of the contract, theBuyer has the right (at his or her expense) to obtain aninspection for termites, wood-destroying insects and organ-isms, and structural damage on Standard Form No. 1 inaccordance with the regulations of the North CarolinaStructural Pest Control Committee. If new construction,the builder will typically provide a new construction ter-mite bond. Extermination and/or repairs (if necessary) areat the Seller’s expense.

• Component Inspections: The Buyer has the option to have(at his or her expense) an inspection of the electrical,plumbing, heating and cooling systems, and the built-inappliances. The Buyer also has the option to have roof andstructural components of the property inspected. Any nec-essary repairs are at the Seller’s expense. If the Seller doesnot elect to complete the repairs, the Buyer may rescind thecontract.

Note: Occasionally, the sale of the Buyer’s present home is a con-tingency. In this case the Seller’s home is usually kept on the mar-ket during this period. The Buyer is sometimes given a short peri-od of time to negate the contingency in the event a new, bona fideBuyer makes a second offer.

•Restrictions: Recorded liens, encumbrances, easements andrestrictions are referenced in the contract.

• Fixtures/Personal Property: The “Offer to Purchase andContract” contains a standard list of fixtures normally includedin the sale. It is important to list any personal property that isexpected as part of the sale. If there is a negotiated sale of per-sonal property (as opposed to fixtures), this may be describedin the contract or become a matter of a separate agreement.

• Adjustments: Adjustments (and prorations) are described in the“Offer to Purchase and Contract” as follows:

“Unless otherwise provided, the following items shall be prorated and either adjusted between the parties or paid at Closing:

• Ad valorem taxes on real property shall be prorated on acalendar year basis to the date of closing.

• Ad valorem taxes on personal property for the entire yearshall be paid by the Seller; unless the personal property isconveyed to the Buyer, in which case, the personal proper-ty taxes shall be prorated on a calendar year basis throughthe date of Closing.

• All late listing penalties, if any, shall be paid by the Seller.

• Rents, if any, for the property shall be prorated to the dateof closing.

• Owners association dues and other like charges shall beprorated through the date of Closing.

• Accrued, but unpaid, interest and other charges to theSeller, if any, shall be computed to the date of closing andpaid by the Seller; interest and other charges pre-paid bythe Seller shall be credited to the Seller at closing and paidby the Buyer. (Other charges may include FHA mortgageinsurance premiums, private mortgage insurance premi-ums and Homeowner’s Association dues.)”

• Type of Deed: Property in our North Carolina market area iscustomarily conveyed by a General Warranty Deed at closing.Foreclosed properties are typically conveyed by SpecialWarranty Deed.

• Buyer Default/Extension to Perfect Title: In accordance with theEarnest Money provisions of the contract, should the Buyerbreach the contract, the deposit is forfeited but this action doesnot affect any other remedies available to the Seller for breach.It is customary for the Seller to be automatically granted anextension for a reasonable time to perfect any flaw found inthe Seller’s title.

• Time-Agreement of Closing: The average time from the execu-tion of the sales contract to closing (Transfer of Title) is 30-60days.

B. Obtaining a Mortgage• Sources of Mortgages: Most Buyers obtain their mortgages from

mortgage companies, credit unions, and in some cases privatefinancing. FHA/VA mortgages constitute a relatively small pro-portion of local loan activity.

• Discount Points: Discount points are sometimes a factor inobtaining a loan. Each discount point equals 1% of the loanamount.

• Other Lender Requirements: Special Fees. Customarily, lendersrequire the following:

• Loan Origination Fee: 1% of the new mortgage loan

• New Plot Plan (Survey): $200-$300 (required if new loan)

• Appraisal Fee: $300-$500

• Credit Report Fee: $50-$75

• Title Insurance: $2.00/per thousand (unless the attorneycan get a “re-issue” rate)

• Termite Inspection: $75

• Basic Terms of Mortgage: Mortgages written in this market gen-erally do not contain a prepayment penalty clause. They do,however, contain an alienation (or “Due on Sale”) clause thatprohibits assumption of the existing mortgage without thelender’s prior approval. VA loans are typically an exception.FHA loans written prior to December 1986 are also excep-tions.

• Procedure: After the Buyer applies for a mortgage com-mit-ment, the lender orders a credit report and an appraisal of theproperty. Verification of employment is generally required as isverification of down payment and other financial resources.

• Definition of Key Mortgage Instruments: The instrument that isevidence of the debt incurred is called a “Promissory Note,”while the security for the note is called a “Deed of Trust.”

• Expediting the Application: In making a mortgage application,the Buyer can expedite the process by having all verificationdocuments readily available. Included are a complete financialstatement (assets and liabilities), credit references, bank andcredit card account numbers and current balances plus anyother relevant material.

• Mortgage Assumptions and Second Mortgages: Assumptions areallowed in this market occasionally, and Sellers grant secondmortgages sometimes. VA loans are typically assumable at theoriginal rate. Conventional loans of less than 10 years are gen-erally assumable only with the permission of the lender andthen at the current interest rate. FHA loans written afterDecember 1986 may be assumable subject to the Buyer’s abili-ty to meet the lender’s qualifying guidelines.

• Bridge Loans: In general, commercial banks make interim(bridge) loans to Buyers whose present home has not sold, orif under contract, has not closed. However, some mortgagelenders will not approve a borrower’s credit until the Buyer’shome has actually been closed.

• Special Seller Financing: During periods of “tight money,” sellerfinancing is occasionally available. Seller financing is not fre-quently seen in this marketplace.

C. Closing (Transfer of Title)• Lawyers: The Buyers are customarily represented by an

attorney at closing, but the Sellers usually do not retain legalcounsel.

• Title: The Buyer (or Buyers, i.e. husband and wife) usuallytakes title as “Tenant by the Entirety.”

• Special Power of Attorney: In the absence of the Seller, the list-ing or selling broker can represent him (or her) through a spe-cial Power of Attorney that names the real estate firm ratherthan a specific individual within the firm. In the case of aPower of Attorney for the Seller, it is necessary for the Seller toexecute a deed as part of this Power of Attorney. The Buyer’sname must be included in the deed and the document mustbe notarized.

• Location of Closing and Recording: The closing is usually held inthe office of the Buyer’s attorney. Pertinent documents arerecorded at the County Courthouse.

• Closing Costs: At closing, the Buyer pays with a certified check,the balance due on the purchase price (the price less thedeposit and new mortgage loan) plus all other closing costs.Customarily, Buyers in this market area receive an estimate ofclosing costs prior to the actual closing. (See chart on backpage).

• Utilities: The parties involved notify the utility companies (gas,electric, water, and phone) to change billing from the Seller tothe Buyer, effective as date of closing or occupancy.

• Pre-Conveyance Inspection: The Buyer has the right to walkthrough the property just prior to closing to check on the con-dition of the house. Closing constitutes acceptance of theproperty.

• Possession: It is customary for the Buyer to take possessionimmediately after closing unless other arrangements have beenmade and put in writing. Recordation of the deed constitutesclosing.

Details of the Steps in the Purchase of Property

DESCRIPTION

This fee covers the lender’s administrative cost in connection with the loan.

A one-time charge used to adjust the yield on the loan to market conditions.

A fee for a statement of property value made by an independent appraiser.

A report obtained from a credit reporting agency detailing the borrower’s credit history

Fee charged by the Veterans Administration on all VA loans.

Collected on the loan from date of closing for the balance of the month when closed(except when the closing takes place on the 1st day of the month). Interest rate x theloan amount divided by 365 = factor x number of days remaining in month = interiminterest.

Generally required on mortgages with a loan-to-value ratio of 80% and up. Somelenders require the entire premium paid at closing while others require a percentage atclosing with monthly payments escrowed. Mortgage insurance protects the lenderfrom loss due to payment default. Mortgage insurance can allow borrower to obtainup to 95% financing.

Lenders require a fire (and extended coverage) policy covering at least the amount ofthe mortgage. If the property is in a flood prone area, flood insurance is mandatory.

Funds held in an account by the lender to assure future payment for such recurringitems as real estate taxes, hazard insurance and mortgage insurance.

The closing is normally handled by the Buyer’s attorney. The attorney is responsibleforobtaining title insurance, handling and computing the closing statement (including allprorations and adjustments) and recording pertinent documents. The deed is normallyprepared by an attorney selected by the Seller. However, the Seller often chooses touse the Buyer’s closing attorney for preparation of the deed.

Protects against loss due to problems or defects in the title which cannot be found oraren’t found on public record. This insurance is required by the Lenders and the costis borne by the Buyer. It is a one-time fee payable at closing. Both lenders’ and own-ers’ policies are available. Although not necessarily required by the lender, an owners’policy is strongly advised.

Recording fees for deed, deed of trust, and any and all other documents.

A survey is required to show the exact locations of the house and the lot line, alongwith easements, buffers and setback lines.

Mortgage insurance required by HUD. May be paid at closing or financed with loanamount.

Transfer taxes in N.C. are computed on the selling price and are paid by the Seller.

The Buyer’s option to have a home inspection per Provision 12.

A report from a N.C. licensed pest control operator stating as to the evidence of wood-destroying insects and resulting damage.

Each office independently owned and operated.

ITEM

Loan Origination Fee

Discount Points

Appraisal Fee

Credit Report

Funding Fee

Interim Interest

Private MortgageInsurance (PMI)

Hazard Insurance

Escrow Deposits

Attorney Fee

Title Insurance

Recording Fees

Survey

FHA Mortgage Insurance

Transfer Taxes

Home Inspection

Termite Inspection

AVERAGE COST

1% of loan amount

Each point equals 1% of loan amount

$300-$500 conventional loan; $300 VAloan; $300 FHA loan

$50 - $75

2% of loan amount if veteran pays nodown payment; 11/2% if 5% down pay-ment; 11/4% if 10% down payment; 3% ifveteran has used VA prior funding, notputting down minimum of 5%

Premiums vary with coverage.

First year premium is paid at closing

2 months hazard insurance;2 months mortgage insurance;5 months taxes (average)

$450-$600

$2 per $1,000 of coverage

$35

$200-$300

.0225 x loan amount(if financed)

$2.00 per $1,000

$200 - $450

$75

T Y P I C A L C L O S I N G C O S T S

A General OverviewA. The Agreement• An “Offer to Purchase and Contract” is complet-

ed with a sales associate’s assistance, signed bythe Buyer and is accompanied by an earnestmoney deposit of usually 3-5% of the purchaseprice. When the offer is accepted, these fundsare placed in a non-interest bearing account bythe listing broker until closing. Then the earnestmoney is credited to the Buyer on the closingstatement.

• Usual contingencies in the contract: obtaininga mortgage commitment, termite inspection,component inspections.

• The Seller agrees to convey the property byGeneral Warranty Deed.

• The average time to closing (Transfer of Title) is30-60 days.

• The Contract is accepted and signed by the Seller.

B. Mortgage• The Buyer submits a mortgage application to a

mortgage company, or other lending institution.

• The Lender orders a credit report, and if satisfac-tory, orders an appraisal of the property.

• Having verified the Buyer’s employment,the Lender approves the Buyer’s credit and

the value of the property as collateralfor the loan.

• The Lender approves the mortgage applicationand sends documentation to the Buyer’s attorneyfor closing.

• The Lender orders mortgage insurance ifmortgage insurance is necessary.

C. Closing (Transfer of Title)• The Buyer’s attorney orders title insurance and

begins computation of closing statement andpreparation of other necessary documentation.

• Utility companies need to be notified when titletransfers so the appropriate parties can be billed.

• Closing is normally held at the office of theBuyer’s attorney.

• The usual closing costs include: loan origi-nation fee (1% of the loan amount), discountpoints, if applicable, private mortgage insur-ance if the loan is greater than 80% loan tovalue, title examination and insurance, haz-ard insurance, credit report, survey, record-ing fees, and appraisal.

• The closing attorney completes the finalstatement, and records the documents at theCounty Courthouse.

• The Buyer (or Buyers, i.e. husband and wife)takes title as “Tenant by the Entirety.”

• The Buyer typically takes possession imme-diately after the closing.

Guide to Buying Your Home

The place to be in real estate. We’re all about home.hpw.com