How much are Closing Costs?
CLOSING COSTS vary from lender to lender so ask your Realtor for the most competitive lenders.
BUYER'S CLOSING COSTS are the "charges" for all the various things that must be done to enable the purchaser and the selected home to be approved for a home mortgage loan.
The most common 'Closing Costs' are as follows:
- Credit check on Purchaser (To verify acceptable credit rating to obtain loan.)
- Appraisal Report on home (To verify value of home to protect loan.)
- Survey of property (To verify No Encroachments to protect loan and Purchaser.)
- Loan Origination Fee (To cover lender's costs of processing/providing loan.)
- Tax Svc Fee, Administration Fee (Additional administration and handling fees.)
- Flood Certification Fee (Cost to verify that property is NOT in a Fema Flood Plain, to protect the Purchaser and lender.)
- Prepaid Interest (The partial month of interest is collected in advance so that all payments will include only one (1) month's interest.)
- Hazard Insurance premiums for 1-year (To provide first year's insurance for protection of Purchaser and lender.)
- Insurance Reserve for Escrow Account (Allows lender to have enough $$ in the escrow account to pay annual insurance bill on behalf of the Purchaser.)
- County Real Estate Taxes reserve for escrow account (Allows lender to have enough $$ in the escrow account to pay annual tax bill on behalf of the Purchaser.)
- Settlement or Closing Fees (Attorney's fee for your title search + handling your closing and coordinating the filing of your deed and other documents to make you the official "owner of record".)
- Title Insurance (Required by lender to cover the amount of your loan.)
- Recording Fee (County Clerk's charge to record/file your deed and mortgage.)
Some other costs associated with the Purchase of a home are often paid at the time of completion but which may be on the Closing Statement are as follows:
- Charge for wood destroying insect/organism inspection and report (This inspection is required by most lenders to verify that the collateral [your house] for your loan is not eaten up by termites or other things.)
- Charge for Whole House Inspection (This is one of the most important events of any home purchase. This inspection may save you thousands of dollars for hidden defects that neither Seller nor Purchaser may notice with their own review.)
Many of the above closing costs will most likely appear on your real estate closing statement.
Do not give up on Home Buying because of Closing Costs. Many times the Seller will pay for part or all of the allowable closing costs on the Buyer's behalf. So do not be deterred. Just call a professional Realtor. I personally recommend John Fister, cell number (859) 533-8777 or contact him by email now.