Speaker 1: Do you want to know the number one thing I hear complaints about in real estate law? It's closing costs. Well, I'm going to do you a favor today, and I'm going to tell you what the closing costs are so that you can be prepared and you won't be shell-shocked on closing day. I'm Tiffany Weber, and I am a real estate lawyer in North Carolina. And after having done thousands of real estate closings, I have a pretty good idea of what closing costs are. So I will explain those to you today. So in your closing disclosure, page two is where you're going to see the breakdown of all of your closing costs. And let me just put this out there. The attorney's fee is like one tiny line item on there. So no, not all of the closing costs are being paid to your attorney. In fact, most of them are going to fund your escrow account or for lender charges or for any invoices you have to pay. But let's take it from the top. The top of the second page of the closing disclosure, section A, that usually includes your lender's origination fee, any fee that you've paid to buy down your interest rate. In section B of the closing disclosure, you're going to see things like your appraisal. And sometimes you pay for that ahead of time. There's an at closing and a before closing column. So if you see your appraisal listed there and it's in that before closing column, don't stress. You're not being charged for it again the day of closing. You're just getting credit for having paid it already. So any credit reports, finding out whether you're in a flood zone, all of those things are usually contained in section B of page two of the closing disclosure. Section C is where you're going to see things like your lender's title insurance policy. Yes, that is a requirement. Your lender wants to make sure that their interest in the property for having lent you money to buy it is going to be protected from anyone who tries to claim an interest against it. That's also got the closing attorney's fee and the title search fee. So the title search is the thing that makes sure that there is no one out there that has a judgment against the property or any liens on the property, no bankruptcies affecting it. It's the thing that makes sure that when you buy the property, you're taking clear title to the property. Don't forget, if you want more information on real estate law, real estate transactions, anything to do with real estate in North Carolina, hit the subscribe button. Now let's get back to the video. Now the next section, section D, is just a subtotal of A, B, and C. So by the time you get to section E, you're going to see recording costs, and that is usually what the Register of Deeds charges to index the documents that are recorded. In North Carolina, that's your deed and your deed of trust, and those are the two instruments that make the whole transaction legally valid. So it's how you can get your interest in the property, and it's how the lender secures your promise to pay the money back. Now other documents can be recorded, like a power of attorney, or there are sometimes other documents that are involved that are not as common, so I won't get into those here. In section F, that's where you're prepaying your homeowner's insurance for a year, and you're also prepaying your interest from whatever day of the month it is that you're closing until the end of that same month. And that's why usually you don't start paying your bill, your mortgage bill, not the very next month of your closing, but the month after, and that's because you paid for that interest up front. Now the next section, section G, if you have an escrow account, which most people will have an escrow account in a residential closing, that's what is saved up to pay your taxes and insurance each year, and on the day of closing, you fund that account so that its balance is never zero. There's always a cushion so that if for some reason taxes increase or your insurance increases, you're never dipping below zero, and the lender's not having to call you to say, oh my goodness, we need $500 today so we can pay your tax bill. So you fund that escrow account on the day of closing. Now the next sections, those are miscellaneous, so that's if you have any HOA capital contributions you have to make, or maybe you paid for your survey at closing rather than ahead of closing, or you've had any other inspections that need to be paid for, and that also usually includes your owner's title insurance policy. Now yes, your lender gets a title insurance policy, but that protects them, not you. Your owner's title insurance policy is usually a lower fee, and it protects you for the whole time that you own the property against anyone who tries to claim a superior interest to you. Now that's not every single thing that can be on a closing disclosure, but that's pretty close. So those are the types of things that you're going to see as part of your closing costs, and all of them are just part of the game when it comes to buying a house. I'm Tiffany Weber, I'm a real estate attorney in Morrisville, North Carolina at Thomas and Weber, and we love to put out videos just like this one so that you can be educated and informed about your real estate transaction. So make sure you subscribe to our channel so that you can see more videos just like this one. I'll see you in the next video.