April 2nd, 2014
Closing -- The completion of the loan process, where the borrower receives funds from the lender in return for promising to repay the loan. At closing, the seller also delivers ownership rights for the property to the buyer. Present at the closing table: the borrowers, buyer's real estate agent, mortgage banker and title closer/lawyer. Sometimes the seller and their representatives also attend.
Lender Title Insurance -- Protects the lender for the amount of the loan against any defaults in title. A title is the recorded ownership history and interest in the property. This fee is included in the closing costs.
Private Mortgage Insurance (PMI) -- PMI insures the lender for any losses suffered if the borrower defaults on the payment. It's typically included in your monthly mortgage payments.
A bit extra: The lender cancels PMI when LTV (loan to value) reaches 78% or 22% equity in the property. Loan to value means the amount borrowed in proportion to the current market value (based on appraisal) of the property.
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