These repayments decrease the principal balance. Of all the steps in buying a home or refinancing a home loan, the mortgage closing, or settlement, probably causes more confusion and uncertainty for the borrower than any other. A settlement may involve several people, and a variety of documents and fees. Once you understand what is involved you may find the entire closing process far simpler than you might have imagined. But it's a process that begins weeks or even months before, and follows an outline set largely by a buyer's original offer to the seller, and it covers many of the key elements of the settlement or closing.
Practices differ from one locality to another regarding who pays what closing costs.
In Maryland, however, buyers and sellers are free to negotiate certain fees. In some cases, certain costs can be shifted to the seller, and thus lessened for the buyer. If costs are shifted, it may affect what the seller will charge for the property. In Maryland, costs can also be cut by shopping for providers of the settlement services. The more you know about the process, the better your chances are for saving money at settlement time.