Obtaining a plot plan is typically handled by a lender or the closing attorney and is a matter of placing a formal request with the county assessor, public works or community development department, or local planning office. It will also show any easements running through the land, but it is less detailed than a full survey. Plot Plan – $110-$150Īlso called a Mortgage Inspection Plan, a plot plan is required by some real estate lenders to show that there are no encroachments or zoning issues and to provide a footprint of the land and the location of structures involved in a sale. There are multiple types of title exams but the most common is the full coverage search that involves accessing the official land documents for the property and reviewing each to see how it could impact the potential sale. Title searches are frequently conducted before any contracts between sellers and buyers are signed. In most cases, buyers do not see the actual title exam and aren’t informed of the results of the search unless there are issues that will impact the transfer of ownership like liens or other restrictions. This is the cost for an attorney to examine records to determine the legal ownership of a property and submit their findings to the lender. It outlines the various responsibilities of both buyer and seller in the period leading up to closing.Ī real estate attorney can modify the P&S agreement to protect a client’s interests, and many attorneys will offer a discount or complimentary Purchase & Sale review if they perform the closing for the mortgage lender. This document is signed roughly two weeks after an offer has been accepted on a home and all relevant inspections have been performed. The review of the Purchase & Sale agreement is important because the standard agreement can favor either buyer or seller depending on where the transaction is taking place. They may also be present on the closing date to go through required paperwork with the buyer. The closing attorney or settlement agent is responsible for not only completing the transaction between buyer and seller, but also registering the transfer of property with state and local governments and disbursing closing proceeds. This is the market rate for the administration cost of reviewing, processing, and closing a mortgage loan for the lender. It always makes sense to compare the cost of a loan with and without points included. In some cases, new home developers will offer to pay for points as an incentive for potential buyers but there can be limits to how much they can legally contribute. Points – VariableĪlso known as “discount points,” this optional expense allows buyers to buy down a mortgage interest rate for the purpose of lowering the monthly mortgage payment.īuying points is a way of paying some interest up front to realize interest savings over the life of the loan – a good idea for buyers who plan to stay in a home for more than a few years.Ī point is equal to 1% of the total mortgage amount but the interest rate reduction associated with buying points can vary by lender and by current market conditions. Additionally, inspectors are typically hired by buyers directly. Note: An appraisal differs from an inspection in that a licensed home appraiser will not look for potential defects in a home. The appraisal helps the lender ensure that the loan amount requested is appropriate for the property under consideration. ![]() Having a home appraised is an important part of the process of applying for a loan or refinancing a mortgage. The appraisal is an independent, professional assessment of a home’s size, condition, and quality that establishes its market value.Īs part of the mortgage application process, a lender will order the home appraisal but buyers are responsible for paying for the appraisal as part of the closing costs. ![]() ![]() Lender origination fees are often represented as a lump sum on a Good Faith Estimate but can be broken down when a customer wishes to see a more detailed explanation of the charges. In some cases (particularly when larger loan amounts are involved or customers are willing to accept a higher interest rate), it is possible to negotiate lower origination fees. Lender origination fees are calculated as a percentage of the total loan amount.įor instance, if a lender charges a 1% fee for originating a $100,000 loan, the bank or broker will charge $1,000. It is paid to the lender who initiates and completes the loan transaction when the loan funds. This fee – also called a loan origination fee – is charged by a lender to cover the process and administration associated with originating a new loan. Let’s look at these numbers and explain each in detail. Most home buyers and sellers are surprised by costs at their real estate closing.
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