Step 5. Closing on Your home

When you attend the closing, it is important that you feel prepared going in and that you have had all questions answered before the closing.

You should be able to receive your Hud Statement (the breakdown of costs) 24 hours before closing so that you have time to review everything. Compare your Hud Statement with the Good Faith Estimate you received to make sure that all costs are inline with your expectations.

About The HUD Statement

On the Hud Statement, you will receive a credit for the taxes that have yet to be paid. In Ohio, we pay our taxes in arrears (meaning that you are paying for the last six months instead of the next six months). Because of this, the previous owner still needs to pay his portion of the taxes.

Instead of paying their property taxes at the closing, they will give a credit to you. Don't spend this money because you will be required to pay it back once tax time comes.

Here are some other costs associated with the closing:

• The title company's processing fee (escrow settlement fee)
• Title insurance (if purchases)
• Recording of the deed
• Pre-paid interest*
• Homeowner's insurance
• Homeowner's insurance impounds
• Property tax impounds
• Notary fee.

*Pre-paid interest - Since mortgage loans are due on the first day of the month, and properties can close any day of the month, the interest will be prorated and paid at this time.

Homeowner's Insurance

Homeowner's insurance premium is paid at the closing. However, since the mortgage company may be paying the continuing payments, it will divide the annual premium by twelve to get an estimated monthly amount and hold 2 months in your impound account.

Notice, that there is not fee for your real estate agent. This fee is paid by the seller. The seller hires their realtor to represent them. Their realtor then splits his or her commission with the selling agent.

This is a huge benefit to you as the buyer because you can have an agent work on your behalf without having to pay anything for their services. Your agent will be there at the closing to help answer any questions that you have and to interpret some of the fees. The title company, the seller, the sellers' agent, and possibly the lender will also attend the closing.

To skip ahead or go back to a previous step, please use the links below:

Step 1. The Initial Consultation  |  Step 2. Preapproval  | Step 3. Searching for the Home
Step 4. Purchasing the Home  |  Step 5. Closing on the Home  |  Step 6. After the Closing