Title Insurance

Closing Costs

Closing costs are the fees and expenses paid at the time a mortgage transaction is finalized. They typically range from 2 to 5 percent of the loan amount and include charges such as the appraisal fee, title insurance, origination fees, attorney fees, and prepaid items like homeowners insurance and property taxes. Closing costs can sometimes be negotiated with the seller or rolled into the loan amount.

Escrow

Escrow refers to a neutral third-party account used during the home buying process and throughout the life of your mortgage. During the purchase, an escrow company holds funds such as earnest money until all conditions of the sale are met. After closing, your lender may maintain an escrow account to collect and pay your property taxes and homeowners insurance on your behalf as part of your monthly mortgage payment.

Underwriting

Underwriting is the process by which a lender evaluates your financial profile to determine whether to approve your mortgage application. The underwriter reviews your credit history, income, assets, debts, and the property appraisal to assess the overall risk of the loan. This step typically takes several days to a couple of weeks. The underwriter may request additional documentation or clarification before issuing a final decision, which will be approved, conditionally approved, suspended, or denied.