What are the loan Closing costs?
Closing Costs
There are certain standard costs associated with
closing the sale of a house. These fees are split between buyer and
the seller, as spelled out in the sales contract.
As I negotiate the sales contract for you, I will
not only work to get the sales price you want, I will also work to
limit the number of closing costs for which you will be responsible.
I will walk you through the closing costs,
answering any questions you may have explaining which costs are
decreed by law to be yours and which are negotiable.
Good Faith Estimate
Buyers will receive a “Good Faith
Estimate” of closing costs at the time the loan application is
submitted to the lender. The estimate is based on the loan officer’s
past experience and may not include all the closing costs. I will be
glad to review the “Good Faith Estimate”, answering questions and
highlighting missing costs and estimates I believe to be low.
Standard Closing Costs
Loan-Related Costs
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Loan Origination Fee
-
Points (optional)
-
Appraisal
Fee
-
Credit Report
-
Interest payment
-
Escrow Account
Taxes
Insurance
Loan-Related Closing Costs
Loan Origination fee
This covers administrative expenses in setting-up
and processing the loan. The loan origination fee may be percentage of
the mortgage amount.
Points (optimal)
An option for the home buyer is to pay points to
lower the interest rate at which the loan will be prepaid. Each point
equals 1 percent of the mortgage amount. For example: on a $150,000
loan, 1point would be $1,500.
Appraisal fee
The fee for having the house appraised may be
incorporated into the closing costs or payment may be required by the
lender at the time the loan application is submitted.
Credit Report
The lender uses a credit report to determine the
creditworthiness of the loan applicant. This fee is often paid when
the loan application is submitted.
Interest Payment
Typically the buyer is required to pay interest
on the mortgage loan to cover the time between the closing date and
when the first mortgage payment period begins. For example: If closing
on May 15. Your first monthly payment begins to accrue interest on
June 1 with your first mortgage payment due July 1. At closing an
interest payment covering the accrual period between May 15 and may 31
may be required.
Escrow Account
At closing a payment may be required to fund the
escrow account if the lender is paying home insurance, property taxes
and/or other expenses out of the escrow account.
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