![]() RESPA is a very important consumer protection statute. How Does RESPA Affect the Settlement Process? Typical items that make up the settlement costs include: Since real estate transactions are quite complex, there can be a long list of associated costs. The terms settlement costs and closing costs are interchangeable and refer to the fees, taxes, and payments required to settle a real estate transaction. ![]() This article will briefly explain a few of RESPA's provisions and how they relate to settlement costs and procedures. The consumer protection law that provides the rules surrounding settlement costs is known as the Real Estate Settlement Procedures Act or RESPA. ![]() These documents, estimates, and statements can help borrowers verify that they are getting the deal they bargained for. It is important for borrowers to make sure that they are receiving a competitive price for the settlement costs, particularly when borrowers are looking at taking out the highest expenditure loan available to finance the purchase of a new house.įortunately, there are laws and regulations that require lenders to disclose certain information about closing costs, including a loan estimate and the closing statement. With a home costing hundreds of thousands of dollars, even a small percentage is significant. However, these costs can add up to around 5% of the total cost of the house. Compared to the price of a home, the closing costs (also known as “settlement costs") may seem minor.
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