Closing Process & Costs

This video explains the closing process and closing costs.

Closing, or settlement, is about you becoming the legal owner of the home you are wishing to buy. Public records currently agree the house belongs to the owners because the title establishes their legal ownership. Swapping these requires Loan Steps, Legal Steps, and Title Steps.

Loan Steps: banks loan you the offer money and you promise to pay back more over time. They charge you loan fees, and collect insurance, interest and reserves.

Legal Steps: to make the public records show that you are the legal owner of the house; the government has to show the transfer of the title through a deed. They charge recordation taxes, transfer taxes, and taxes and stamps.

Title Steps: the title company handles the transfer of the title; you pay for their help. They have to find all the records from the government to make sure the sellers actually can sell the home; this is called a Title Search. The seller might have missing heirs, former spouses, or other claims that show up long after the sale that shows that the property you are purchasing actually belongs to them. To protect this investment you purchase Title Insurance. If you or your agent orders title work Michigan Land Title Association member, you will get a quote on these costs.

To recap, closing involves Loan costs, Legal fees, and Title charges. At your closing meeting with the sellers, the title company will have all of these costs summarized on the Settlement Statement