Typically, the remainder of your down payment will be due a day or so before the actual close of escrow.
The title company will email us a Net Sheet, which will outline the balance of the down payment due in addition to all of the closing costs and fees. The amount due will be slightly higher than needed to cover any potential changes.
If any of the funds used to purchase your new home will be gifted from a family member, this needs to be disclosed to your mortgage lender as early on in the loan process as possible so the underwriter can verify and approve these assets. It is preferred that the down payment and closing cost funds be transferred to and held in one account for the duration of your loan approval process. Because these funds will have to be tracked, this account must be disclosed to your mortgage lender as the one to be used for the down payment.
Closing costs are fees associated with buying a home. They are paid at the end of the real estate transaction (usually as part of your down payment) and can vary depending on where you live, the type of loan you obtain, and the residence you purchase. The costs run from 2% to 5% of the purchase price of your home.
Buyers can minimize closing costs and fees. There are mortgage loans that involve no closing costs, although you may be charged a higher interest rate or the costs may be included in your mortgage. So ultimately, you will still pay these costs one way or the other. You can also ask the seller to cover all or some of the closing costs, but this typically needs to be negotiated in the initial purchase agreement.
Below is a list of just some of the fees you may have to pay at closing:
- Application fee
- Appraisal
- Attorney fee
- Closing or escrow fee
- Courier fee
- Credit report
- Escrow deposit for property taxes and mortgage insurance
- HOA transfer fees
- Homeowner’s insurance
- Lender’s Policy Title Insurance
- Origination fee
- Inspection fees
- Private Mortgage Insurance (PMI)
- Recording fees
- Survey fee
- Title company title search fee
- Transfer taxes
- Underwriting fee
For a detailed explanation of each of these fees, we encourage you to read this article or click here for a guide to California Closing Costs.
Once your down payment funds are prepared, it’s time to conduct the final walk through.
