Closing

 
General Mortgage Information
 
 
 
Rates, Terms & Points
 
 
 
Closing
 
 
What is closing?
What are closing costs?
How does closing work?
What is the Good Faith Estimate?

What is Private Mortgage Insurance? When do I need to pay it?
Do I need homeowners insurance?
Do I need title insurance?
Do I need flood insurance?
 
What is closing?

Closing is the day when the sale or purchase of a home is complete, or when you receive the proceeds of your refinance loan. This is also known as settlement day.

 

What are closing costs?

Closing costs are expenses that are paid during closing or settlement that are in addition to your down payment, pre-paid property tax and homeowner's insurance. Closing costs vary, please speak with a Mortgage Advisor for more details. The borrower usually pays closing costs associated with a Mortgage. Some purchase mortgages allow for the seller to pay some portion of the closing costs. There are closing costs associated with both purchase and refinance mortgages.

You can expect to pay the following closing costs at the time of settlement:

    • appraisal fee - covers the cost of a professional written estimate of the property's value.
    • Attorney's or escrow fees - your own, and the lender's if they have one.
    • Credit report fee.
    • Points .
    • Documentation preparation - covers the cost of preparing the deed and other paperwork.
    • First-year's premium on fire and hazard insurance.
    • Impounds - sufficient to cover real estate taxes on the purchased property for the current tax period to date. The lender then pays these bills when they come due.
    • interest - paid from the date of closing until 30 days before your first monthly payment.
    • title insurance .
    • Mortgage insurance if required.
    • origination fee - covers the lender's administrative costs.
    • Recording fees.
    • FHA mortgage insurance (FHA loans only).
VA guarantee fees (VA loans only).

 

How does closing work?

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Closing, also known as settlement, is when a property's purchase is complete or the mortgage refinance is funded. During closing, the buyer typically pays for the home and closing costs in one lump sum. Once the buyer and seller sign the documents, the deed is recorded in the new owner's name and the mortgage loan officially begins.

 

What is the Good Faith Estimate? top

After you apply for a loan, the lender will disclose an estimate of the fees and costs associated with that loan, whether you are buying a home or refinancing. This estimate will include the fees you will be expected to pay at closing.

 

What is Private Mortgage Insurance? When do I need to pay it?

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Private Mortgage Insurance (PMI) is required when your loan exceeds 80% of the value of your property. This insurance protects the lender against loan default. You are provided disclosures regarding PMI when you apply.

 

Do I need homeowners insurance?

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Yes. CalCity requires members who close Mortgage and Home Equity loans to maintain adequate homeowners insurance on their property for as long as we hold the mortgage lien on your property.

 

Do I need title insurance? top

Title insurance protects the lender and homeowner against any loss resulting from a title error or dispute. Title insurance protects the homeowner until the property is sold. A title search is a search of public records to confirm the property's owner and to find out if there are any liens against the property. New title insurance policies are required on purchase money mortgages and traditional refinance mortgages. A title insurance policy is required on purchase money mortgages and traditional refinance mortgages. Title insurance is not required on our 20-year Home Equity Loan and our EXPRESS Refi Mortgage.

 

Do I need flood insurance? top

Flood insurance is required for properties located in federally designated flood areas as determined by FEMA (Federal Emergency Management Administration). When you apply for a Mortgage or Home Equity Loan with CalCity, a flood determination certificate is purchased to determine if you are in a flood plain. It is important to note that normal homeowners insurance does not cover flood losses.