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| Closing Costs |
| When you apply for a loan your lender is
required to by law to give you a Truth-in-Lending estimate of your closing
costs. This estimate is based on local practices as well as the sales agreement
with the seller. Both the buyer and the seller are responsible for portions of
the closing costs. For some of the costs, it depends on where you live and the
local custom as to who pays what. The majority of the fees are in relation to
the loan, where the lender charges certain fees for giving you a mortgage. The
RESPA HUD-1 Statement outlines who pays what. A copy is given to the buyer at
the end of the closing for his/her records. The RESPA HUD-1 is signed by the
buyer, seller and closing agent. Real
Estate Settlement Procedure Act (RESPA) is governed by the Department of
Housing and Urban Development (HUD). This act was passed to help the buyer and
seller ensure an ethical transaction. There will also be costs outside the closing.
These are referred to as considered payments outside closing (POS). |
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