Financing, Settlement and Closing
Loan basics
Buyers use conventional, FHA, VA, and USDA financing. Lenders evaluate credit, income, assets, loan-to-value ratio, and debt-to-income ratio. Private mortgage insurance often applies to high-LTV conventional loans. Points are prepaid interest; the APR reflects the cost of credit over the loan term, so it is usually higher than the note rate. The secondary market, including Fannie Mae and Freddie Mac, influences loan availability.
Disclosures and settlement
Federal disclosure rules require a Loan Estimate soon after application and a Closing Disclosure at least three business days before consummation. RESPA prohibits kickbacks and unearned fees for settlement services. New Hampshire closings commonly involve attorneys, title insurance, recording, prorations, and a settlement statement. The state real estate transfer tax is generally $1.50 per $1,000 of consideration, typically split equally between buyer and seller unless the contract says otherwise.
Traps
Do not confuse the note rate with the APR. Do not assume the buyer pays all closing costs or the entire transfer tax. A changed Closing Disclosure may restart the three-business-day review period. Prorations are based on the closing date and the parties' agreement.
Worked example: A property sells for $400,000. The transfer tax is $400,000 divided by $1,000, multiplied by $1.50, or $600. Absent a different agreement, the buyer and seller each pay $300 at closing.