Glenda Feeken - Come Live and Play on the Kenai

Settlement or closing usually takes one of two forms.

1. You, your agent, and attorney (if desired) meet with the sellers, their agent and attorney, and a representative of the title company to close the sale and complete the paperwork to transfer the property.
2. An escrow officer is appointed to make all the preparations for closing and brings in the buyer and seller separately to sign the respective documents. Either way, you should be prepared with the following:
   • Your new homeowners insurance policy. If the first year has been prepaid, bring the receipt. If not this will be paid at closing. (See Homeowners Insurance below)
   • A certified or cashiers check for any balance on the down payment plus closing costs.
   • Your check book in case of incidental costs not included in the settlement estimate provided by your lender.
   • A good pen and sturdy hand to sign all documents including the mortgage and mortgage note which specifies your monthly principal and interest payments.

Closing costs vary depending on price, terms, location and other factors. Your lender should provide you with a pre-settlement estimate so you dont have any surprises, however. Its advisable to be prepared for a few extra incidentals at closing. Here are the expenses you should expect.

• Loan origination fee (typically 1% of mortgage)
• Discount points—you may buy down your interest rate by paying points (each point = 1% of loan amount)
• Title search
• Title insurance fees
• Survey (if required)
• Appraisal Fee
• Transfer tax (state/local tax—varies)
• Prepaid interest—covers time between settlement and first payment
• Prepaid mortgage insurance premium
• Home insurance premium
• Proper tax escrows
• Attorney or escrow company fee
• Recording fees

Finally, after all the documents are signed, and fees paid, the home is yours!

Homeowner's Insurance

In order to secure financing, youll have to acquire a homeowners insurance policy to protect the home against hazards such as fire, weather damage or other catastrophic destruction, theft, glass breakage, vandalism, other damages, and even injury to a visitor on the premises. There are two basic types of policies to consider:

1. All-Risk—reimburses you for all major hazards and lesser damage resulting from problems such as burst water pipes, etc. This type of policy is limited to the property itself and does not reimburse for lost equity or personal property contained in the house so additional coverage may be desirable.
2. Guaranteed Replacement Cost—This policy covers the home and its contents for full replacement value at current market rates rather than the cash value which depreciates over time.

Home Protection Plan

Some sellers provide a Home Protection Plan for the buyer that covers certain items for a one-year period like:

• Heating and air conditioning systems
• Interior plumbing
• Built-in appliances
• Electric pool equipment

If a Home Protection Plan is not provided on the home you contract for, you can acquire the coverage yourself. The price of programs will vary in price and coverage and among carriers.