Base RatesReal estate transactions involve large sums of money and collateral property. They are subject to legislative statutes, local ordinances, case law and physical inspections. These deals usually also involve credit checks, employment verifications and asset evaluations. Needless to say, all parties involved, i.e. buyers, sellers, borrowers and lenders, must fulfill their respective contractual obligations before funds are disbursed and property is conveyed. Because of all these variables, another party is contracted to hold deposit and loan funds, releasing them only when agreed-upon duties are performed. This final player is known as the escrow agent, whose own performance is governed by the escrow agreement.

Title InsuranceAnyone considering buying a home knows it is a huge decision, especially in Los Angeles. Unfortunately, the mortgage process and what it means when a real estate transaction is in escrow can be very confusing to prospective homeowners. Because of the complications and mystery surrounding the process, it is not uncommon for people buying a house to be caught with high interest rates and fees that they were previously unaware of.

When looking to buy a house, many people take out a loan. It is uncommon for people to pay for houses up front, simply because today’s housing prices are so high. When you take out a loan from the bank in order to buy a house in Los Angeles, it is so you can pay the sticker price of the house. However, the price of a house is not the only cost associated with owning property. You pay these additional costs on a monthly basis, as well as interest on the loan you took out. In the real estate world, all of your monthly mortgage costs are commonly referred to as “PITI.” Many times, funding for your PITI payment is placed in an escrow account, which the bank withdraws money from each month. Below, we break down this acronym into simpler terms so that you can understand exactly what your real-estate agent or escrow agent is referring to when they use this acronym.

Closing CostsBuying a house in Los Angeles is an expensive process. You have the large lump-sum of your down payment, the 30 year (in many cases) monthly mortgage payments you will have to make that include interest, taxes, insurance, and principal repayment AND you have the closing costs. You’ve heard of these, but what exactly contributes to these costs? Well, if you’re not sitting down, you should be. The following is a long list of hidden fees that can make up the expensive closing costs that are part of buying a home. Some are small, while others are more substantial. Whatever the case, it is important to know exactly where your money is going.