There are certain standard costs associated with closing the sale of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract.
As I negotiate the sales contract for you, I will not only work to get the sales price you want, I will also work to limit the number of closing costs for which you will be responsible.
I will walk you through the closing costs, answering any questions you may have explaining which costs are decreed by law to be yours and which are negotiable.
Good Faith Estimate
Buyers will receive a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. The estimate is based on the loan officer's past experience and may not include all the closing costs. I will be glad to review the "Good Faith Estimate," answering questions and highlighting missing costs and estimates I believe to be low.
Interest Payment (this amount is based on the number of days from the date the Lender funds the loan to the last day of the month. This is also known as pre-paid interest. For example, if you sign on the 1st of December, it will typically take the lender up to 48 hours to send funds to escrow. So, if the loan funds on the 3rd of December you will pay interest from the 3rd to the 31st at closing (29 days). Due to interest being paid in arrears, your first payment would be due February 1st.
NOTE: Hawaii has a Good Funds Law. Although your loan may fund on the 3rd, it will not record until at least the next day at 8:01am. Do not expect keys or a check until it records at the bureau. Escrow will not release funds.
Homeowners Insurance (typically you will pay for one year in advance + two months' reserves)
Flood, Hurricane or Quake Insurance (typically you will pay for one year in advance + two months' reserves)
Private Mortgage Insurance (in most cases you will pay this if your loan amount exceeds 80% of your property's value. In a residential purchase, the value is determined by the sales price or appraisal, whichever is lower.
Title Insurance (ask for discounts)
Optimum Realty LLC 1050 Bishop Street #402 Honolulu, HI 96813
