Closing Costs Archives – Page 14 of 14 – First Rate Financial Group

Closing Costs: Understanding What It Costs to Close on a Home and What You Can Expect to Pay If you’re in the process of buying a new home, you’ve likely heard the term “closing costs” in regards to the many different fees and taxes that you’ll be required to pay during the purchase process.

In this post we’ll look at a number of these closing costs and what you will be expected to pay when you buy that next dream home.

Taking out a Mortgage? There Will Be Fees Attached

If you’re taking out a mortgage to finance the cost of buying your home you’ll end up incurring a variety of fees. Nearly all lenders will charge a mortgage application fee, which covers the cost of processing your application and all of the necessary paperwork.

You’ll likely have to pay for a professional appraisal of the home as well, as the lender will want to ensure that they aren’t lending you more than the house and property are actually worth.

Inspection And Insurance Costs Will Add Up

If you’re buying a pre-owned home you’ll need to pay for a home inspection to gain an understanding of the home’s condition and if you’ll need to make any repairs in the near future. You’ll also need to purchase homeowner’s insurance on the property to protect yourself in the event that something does go wrong with the home.

If you put less than 20 percent down on the cost of the home, your mortgage lender may also require that you purchase private mortgage insurance; this will vary depending on which state or province you are buying in.

Don’t Forget About Escrow Fees and Taxes

As with any major financial transaction you’ll need to satisfy the tax man by paying various taxes on your purchase. These will vary depending on where you are buying your home, but might include sales taxes, property taxes, transfer taxes, recording fees, title transfer fees and more.

If you used a third-party escrow service to manage these fees or to hold your deposit during the closing process you’ll also need to pay escrow fees prior to signing the final paperwork.

What Are The Closing Costs Of Real Estate You’ve found the perfect property and a great mortgage loan with the best interest rate you can find. What’s next in the home buying experience? Signing the contracts and paying the closing costs. But what exactly are closing costs?

Here Is A List Of The Most Common Closing Costs:

Titling Fees – These include the title search and title insurance, and the associated attorney fees. These costs are usually paid by the seller but can be assigned to the buyer.
Recording Fees – The government charges a fee to record the change in ownership of the [city] real estate. This can be paid by either the seller or the buyer.
Survey Fee – A survey fee can be required by the lender. It is a fee for the survey of the land or lot, and its structures, to determine that it matches the property description.
Mortgage Application Fees – Occasionally mortgage application fees are included in the closing costs, but usually are paid prior to closing by the buyer.
Appraisal And Inspection Fees – An apriaisal and inspection are required by the lender to ensure that the value of the property is equal to that of the loan, and to make sure there aren’t any underlying problems that detract from the property value. These fees are usually paid by the buyer.
Points – Points are equal to one percent of the principal of the loan. These discount points are paid by the buyer to the lender to reduce the final interest rate of the loan.
Brokerage Commission – The seller pays the real estate agent the brokerage commision fee for listing, showing the property, and handling the contract negotiations. The commission is usually a percentage of the sale price of the property, and determined in advance by the seller and the real estate agent.
Underwriting Fees – The buyer pays underwriting fees to the lender to pay for the costs of determining if the buyer qualifies for the mortgage loan.
Property Tax – County property taxes are usually required to be paid for six months in advance at the time of closing. The buyer is responsible for these fees.