What are closing costs?
Closing costs are sometimes also called settlement costs. These are the costs a lender charges for funding and completing your loan and are generally charged at the time of closing (or settlement). They often include discount points, which are fees paid to lower your interest rate. Settlement costs/closing costs vary greatly depending on your state, county, and/or metropolitan area. They also vary from one lender to another, so it pays to shop around.
Closing costs are money paid by the borrower in connection with the closing of a mortgage loan. Depending on the specific loan this may include an origination fee, discount points, appraisal, credit report, title insurance, attorney’s fees, survey and pre-paid items such as tax and insurance payments.
Closing costs are fees charged by the lender and closing agent to process and record any new loan application and vary from state to state and county to county. These costs may include, but are not limited to, appraisal, credit report, title, prepaids, county and city transfer taxes, recording fees and title insurance premiums. Generally, closing costs amount to 3% – 7% of the loan amount. The percentage depends on the region of the country in which you buy/own, the loan amount and the time of the month you close. In some jurisdictions, an attorney represents the lender and borrower and in others, a title company represents the lender and borrower at the closing. Prior to closing, be sure to inquire if the lender requires an escrow account set up for the payment of the real estate taxes and homeowners insurance. It is important that you review what the closing costs will be with your lender and closing agents.
