If you use an attorney, meet with him/her and ask about closing costs. In New York these can add up. Also, the day of the month you close title on will make a difference, and this relates to something Kao said. The bank cannot charge you interest on the first day of the loan, which makes sense, right? But, it does want its interest at the end of the first 30 days (note that I did not say "month"). So, at the closing they will calculate your daily interest, and then calculate how many days are left in the month, and using those two numbers they will calculate an amount for the remainder of the month. You will be charged that amount at closing, and your first payment will not be due until the 1st of the following month. So, if you close on September 29, you will pay one day interest and your next payment is due on November 1. So, if you do not have a lot of cash on hand for the closing, you might want to close at the end of the month. But then your first payment is a lot closer than if you close earlier in the month.
Property taxes are also pro-rated. In New York it gets kind of crazy. On Long Island we pay a General Tax twice a year, and it is due on January 15 and July 15 (I'm going by memory and it has been a while, but my point will be the same even if I'm off by a month). We also pay School Tax twice a year and it is due on April 15 and October 15. But, the owner pays the tax, and they pay it for six months, so at closing you will have to pay them the balance of the six months remaining. Which on Long Island is different for the School Tax than for the General Tax (because of the way they're staggered). Also, they may get a Veteran's Benefit discount, and you may not, so that may have to be adjusted. There may also be a Water Tax if there is a local Water Authority, or a Village Tax if the property is within an Incorporated Village. Everything has to be adjusted at closing. I won't go into the fact that there is a grace period, and if you purchase within the grace period the sellers may not have paid yet, and then you get to pay the full six months. But, of course, you then get money back from the seller for the pro-rata tax to cover the amount of time they were in the house.
In addition to the above, there are loan fees and charges. These are what kill you. Death by nickel and dime. It is your responsibility to ask everyone, at every step of the process, about the charges. Make sure, **** sure, that your last questions always is, "and so this is everything?" If they say, "Oh, there is one other thing . . ." then you must say again, "and so this is everything?" like a broken record until they say, "Yeah, that's everything." Meanwhile, you write it all down and go back over it, showing them you wrote it all down, before saying "Thank You." I believe there is a Federal Law now that requires a mortgage company/mortgage bank to make a disclosure within a certain amount of time (I don't remember what triggers it, contact or an actual application) concerning closing costs. Make sure you know who is paying the bank's attorney at the closing (most likely you are, but it may be an application cost or it may be something you need to have on hand at closing).
As far as the inspection goes, keep in mind that the inspector is in the business of inspecting, and so his motivation is to find as many things as he can so that you think he did a great job and recommend him to others. For instance, every foundation has cracks. A crack is not the end of the world. It may be, if for instance it turns out the house is built on loose or wet soil, but you need to look closely at all the issues that are discovered. You are probably not going to find a house that has zero issues. But you need to be comfortable with the issues that turn up, just don't panic when you get the report. For instance, on Long Island we have soil that is perfect for termites. Termites is not a reason, without looking further, to break a deal. Get a look at the wood structure and if it is O.K., treat for the termites and go ahead with the deal. Charge the seller for the treatment, get a guarantee from the exterminator, and have an inspection every few years after that.
This is not legal advice as I know nothing about your situation, and you should hire an attorney since this is probably the most expensive investment of your life.
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