Title search and insurance

To protect themselves against the possibility of a fraudulent sale, lenders require a title search. A title search uncovers any liens, lawsuits and legal claims involving the property. Lenders also require that you buy title insurance to further protect you and them just in case there is still a complication with the title after the deal has been made.

Survey

The title insurance company may require a survey of the property. This is to verify the zoning location and official boundaries of the property. Cost is around $350.

Insurance

Homeowner's insurance protects the contents of your home from theft and the structure from most disasters.

A word about closing costs

Closing costs are a mystery to most buyers. One reason is that they aren't standard and they vary from state to state - and factors such as your loan balance can make a difference in the overall closing costs. Terminology varies, too. In order to compare ask the following questions:

What is your best estimate of what it will cost me to close this loan?

Does your estimate include only your lender fees?

What fees are you including in your estimate?

So how do you find out what the closing costs will be?

Call several lenders (Golden Mortgage for one!) for a quote that includes all of the closing costs and an itemization of the fees. Since most lenders will allow you the option of paying points to get a lower interest rate, or not paying any points to get a higher interest rate, make sure each lender gives you the same interest rate quote and tells you the associated discount points (lenders will vary the associated points to offer the same rate). Then you can make an apples-to-apples comparison of the rate offered from one lender to another. In theory, the APR (Annual Percentage Rate), which is required to be disclosed by the government, is a good tool to compare rates across different lenders. That's because it includes most closing costs expressed in the form of a rate. However, it doesn't allow you to compare the cost of financing among different lenders unless they are offering the same interest rate or unless the quote is a no-points quote.

You should also know that the higher the points paid up front, the lower the interest rate - and thus the APR. That may be a fine way to pick a loan if you're planning to stay in your home forever, but it probably will hurt you if you only end up staying in your home a few years.

The final walk-through

Most contracts allow for a final walk-through inspection. Here's your last chance to make sure that the seller has properly vacated the premises, left it "broom clean," and left behind the agreed-upon appliances. Make sure that all the contractual agreements have been met at this time.

Don't worry - be happy and Celebrate!