What are closing costs?
Closing costs are expenses that are paid during closing or settlement that are in addition to your down payment, pre-paid property tax and homeowner’s insurance. Closing costs vary, please speak with a Mortgage Advisor for more details. The borrower usually pays closing costs associated with a Mortgage. Some purchase mortgages allow for the seller to pay some portion of the closing costs. There are closing costs associated with both purchase and refinance mortgages.
There are several categories of closing costs. First, the mortgage company can charge various fees such as processing fees or administration fees. Next the actual lender or investor who gives you the money can charge fees such as underwriting, commitment, tax service, etc. Then, there are title fees. These can include the title search, commitment, endorsements, recording and courier fees. Usually, the mortgage company can negotiate their fees but rarely will a title company or investor lower their fees. Usually the total closing costs will range in the area of $1,000-$1,400.
Fees paid by the borrower at closing in connection with the loan. Points, appraisal, credit report, attorney, recording, title search and survey fees. Prepaid finance charges are those fees that reoccur over time such as the insurance and taxes due. These fees are broken down on the Good Faith Estimate.
