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Real Estate Attorney Breaks Down And Explains ALL Closing Costs - YouTube
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Do you want to know the number one thing
I hear complaints about in real estate
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law, it's closing costs. Well,
I'm going to do you a favor today,
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and I'm going to tell you
what the closing costs are,
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so that you can be
prepared and you won't be.
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Shell-shocked on closing day.
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I'm Tiffany Webber and I am a real
estate lawyer in North Carolina. And.
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After having done thousands
of real estate closings,
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I have a pretty good idea
of what closing costs are.
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So I will explain those to you
today. So in your closing disclosure,
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page two is where you're going to see
the breakdown of all of your closing
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costs. And let me just put this out there.
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The attorney's fee is like one
tiny line item on there. So no,
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not all of the closing costs are
being paid to your attorney. In fact,
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Most of them are going to fund your
escrow account or for lender charges
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or for any invoices you have to
pay. But let's take it from the top,
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the top of the second page
of the closing disclosure,
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of section a that usually includes
your lenders origination fee.
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Uh, any fee that you've paid to buy down
your interest rate and section B the
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closing disclosure, you're going
to see things like your appraisal,
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and sometimes you pay
for that ahead of time.
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There's an act closing and
a before closing column.
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So if you see your appraisal listed
there and it's in that before closing
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column, don't stress, you're not being
charged for it again, the day of closing,
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you're just getting credit
for having paid it already.
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So any credit reports finding out
whether you're in a flood zone,
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all of those things are usually
contained in section B of page two of the
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closing disclosure.
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Section C is where you're going to see
things like your lender's title insurance
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policy. Yes, that is a requirement.
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Your lender wants to make sure that
their interest in the property for having
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lent you money to buy it isn going to
be protected from anyone who tries to
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claim an interest against it.
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That's also got the closing attorney's
fee and the title search fee.
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So the title searches the thing that
makes sure that there is no one out there
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that has a judgment against the
property or any liens on the property,
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no bankruptcies affecting it.
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It's the thing that makes sure
that when you buy the property,
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you're taking clear title to the property.
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Don't forget if you want more
information on real estate law,
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real estate transactions, anything to
do with real estate in North Carolina,
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hit the subscribe button. Now let's get
back to the video. Now the next section,
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section D is just a
subtotal of a, B and C.
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So by the time you get to section E,
you're going to see recording costs.
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And that is usually what the register
of deeds charges to index the documents
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that are recorded and North Carolina,
that's your deed and your deed of trust.
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And those are the two instruments that
make the whole transaction legally valid.
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So it's how you can get your
interest in the property.
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And it's how the lender secures your
promise to pay the money back. Now,
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other documents can be recorded
like a power of attorney, or, um,
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there are sometimes other documents that
are involved that are not as common so
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I won't get into those here.
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In section F that's where you're prepaying
your homeowners insurance for a year.
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And you're also prepaying your interest
from whatever day of the month it is
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that you're closing until
the end of that same month.
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And that's why usually you don't start
paying your bill, your mortgage bill,
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not the very next month of your
closing, but the month after.
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And that's because you paid for that
interest upfront. Now the next section,
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section G, if you have an escrow account,
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which most people will have an escrow
account in a residential closing,
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that's what is saved up to pay
your taxes and insurance each year.
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And on the day of closing
you fund that account.
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So that it's balance is never zero.
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There's always a cushion so that if
for some reason taxes increase or your
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insurance increases, you're
never dipping below zero.
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And the lenders not having to
call you to say, Oh my goodness,
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we need $500 today, so
we can pay your tax bill.
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So you fund that escrow account on the
day of closing. Now the next sections,
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those are miscellaneous. So that's, um,
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if you have any HOA capital
contributions you have to make, um,
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or maybe you paid for your survey at
closing rather than ahead of closing,
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or you've had any other inspections
that need to be paid for.
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And that also usually includes your
owner's title insurance policy. Now, yes,
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your lender gets a title insurance
policy, but that protects them, not you,
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your owner's title insurance policy is
usually a lower fee and it protects you
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for the whole time that you
own the property against
anyone who's tries to claim
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a superior interest to you. Now,
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that's not every single thing that
can be on a closing disclosure,
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but that's pretty close.
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So those are the types of things that
you're going to see as part of your
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closing costs.
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And all of them are just part of the
game when it comes to buying a house.
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I'm Tiffany Webber. I'm a real
estate attorney in Mooresville,
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North Carolina at Thomas and Webber.
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And we love to put out
videos just like this one,
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so that you can be educated and informed
about your real estate transaction.
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So make sure you subscribe to our
channel so that you can see more videos,
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just like this one.
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I'll see you in the next video.
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