What Are Mortgage Closing Costs?
Your Closing Costs fall into five categories: 1. property-related fees, 2. loan-related fees, 3. mortgage insurance fees, 4. property tax, 5. homeowners insurance and title fees.
TOTAL ESTIMATED CLOSING COSTS
Cost as a percentage of the loan’s value CHECK WITH YOUR LENDER
Typically, you may pay between 2% and 5% of the loan value. CHECK WITH YOUR LENDER
FIXED COSTS & FEES CHECK WITH YOUR SERVICE PROVIDERS
BREAKDOWN OF COSTS
The costs and fees can be adjusted to better match your situation. ALL AMOUNTS ARE ESTIMATES. You MUST check with your Lender, Title Office and other service providers for the correct amount.
APPRAISAL FEE $300
Fixed by Appraiser: Lenders require a property appraisal to make sure your loan amount coincides with the market value of your home.
HOME INSPECTION FEE $400 TO $500
Shop: A bank needs to make sure the home is structurally sound and in good enough shape to live in. You can hire any home inspector. If the inspection reveals problems, you may want to negotiate a lower price or look for a different property.
APPLICATION FEES $300
Fixed by Lender: This covers the cost of processing your request for a new loan and includes credit-check costs and administrative expenses.
ATTORNEY’S FEE CHECK WITH YOUR ATTORNEY
Shop: Some states require an attorney to be present at the closing of a real estate purchase. Shop around to find the best price if you need one.
PREPAID INTEREST CHECK WITH YOUR LENDER
Fixed by Lender: Most lenders require buyers to pay the interest that accrues on the mortgage between the date of settlement and the first monthly payment due date.
LOAN ORIGINATION FEE CHECK WITH YOUR LENDER
Shop: Typically about 1% of the loan value, the loan origination fee is charged by the lender for evaluating and preparing your mortgage loan. When shopping for a loan, you should find out the lender’s origination fee.
POINTS CHECK WITH YOUR LENDER
Shop: You can pay points to reduce the interest rate over the life of your loan. One point equals 1% of the loan amount. Each discount point typically lowers the interest rate by a 0.25% percentage point.
MORTGAGE BROKER FEE CHECK WITH YOUR LENDER
Shop: If you work with a mortgage broker to find a loan, the broker usually will charge a commission as a percentage of the loan amount. The commission averages from 1% to 2% of the loan amount, so ask brokers for their fee structure.
UPFRONT MORTGAGE INSURANCE CHECK WITH YOUR LENDER
Shop: Depending on your credit score and the size of your down payment, private mortgage insurance can range from 0.55% to 2.25% of the loan amount.
PROPERTY TAX CHECK WITH YOUR LENDER
Fixed by County: Buyers typically pay two months’ worth of city and county property taxes at closing.
HOMEOWNERS INSURANCE PREMIUM CHECK WITH YOUR INSURER
Shop: In most cases, lenders require you to buy 1 year of HOMEOWNERS INSURANCE before closing. Shop around for the best home insurance quote.
TITLE INSURANCE CHECK WITH THE TITLE COMPANY
Shop: Title insurance policies are available for lenders and home buyers. The title insurance for lenders, also called a loan policy, protects them in case there’s an error in the title search and someone makes a claim of ownership on the property after it’s sold. Home buyers should get title insurance in case the title search reveals problems or claims are made on their home after closing.
TITLE SEARCH FEE CHECK WITH THE TITLE COMPANY
Shop: A title search is conducted to ensure that the person selling the house actually owns it.
Some information in this report was taken from an article by Deborah Kearns a staff writer for NerdWallet.com.com. For complete report login to https://www.nerdwallet.com/blog/mortgages/closing-costs-calculator/