WHAT IS A CLOSING COST?

1. WHAT IS A CLOSING COST? Home buying can be an exciting adventure but it is not always easy. There are many factors during the process that have to be considered. It is important for the buyer to be familiar with each of the different parts of the process. If you are a new buyer, then you may find it is advisable to take help from a peer who has already been through the process. One such part of the home buying process is the Closing Cost. DEFINING CLOSING COST The fee that is paid at the closing of a real estate transaction is called a closing cost. The time at which the property has been transferred to the name of the buyer is known as the closing. A closing cost is not necessarily paid by the buyer as you might think. It can be paid by either the seller or buyer depending on the type of closing cost. TYPES OF CLOSING COST There are many types of closing cost. A few have been mentioned as below ATTORNEY FEE This cost can be paid by either the buyer, the seller or by both of them. This cost is for the record of all the legal and official documents. Both parties should be represented by their own layers. SURVEY FEE This is due to the inspection of the property. Inspection includes the survey of the structures built on the property and encroachments. It can be paid by either party. This is usually required by institutional and commercial lenders.

2. RECORDING COST This can be paid by either seller or buyer. It is required by the government as evidence that the property’s title has been transferred from one party to another. TRANSACTION TAXES This amount can be paid by both or either one of the parties. This tax is required by law. It can vary according to the location of the property; meaning the area of jurisdiction. VA LOAN A VA Loan or Veteran Affairs Loan is a type of mortgage loan which is a promise from the U.S Department of Veteran Affairs. This is given to the veterans as a financing solution for long-term basis. It can also be provided to the veteran’s surviving spouse but only if they don’t get married again. RELATION BETWEEN VA LOAN AND CLOSING COST The VA loan provides a distinct advantage to the U.S Veterans. Veterans are not required to pay a down payment on the borrowed loan. Besides this benefit, the Veterans have to pay only limited types of closing costs. This gives them the chance to save money. The closing costs that Veterans pay can be remembered by the acronym ACTORS. A for Appraisal C for Credit Report T for Title Insurance O for Origination Fee R for Recording Fee S for Survey There is still the question of what about the other costs? The veteran can pay them but is not necessarily required to; however, payment of the costs is still required for the closure of the transaction. Therefore, they are paid by the seller. This advantage around the closing costs is a blessing for veterans. After serving loyally to their country, they deserve this advantage to make the rest of their lives a bit easier.      