Mortgage Closing Costs

If you have applied for a mortgage, you will also have to pay the closing costs. These are the fees that lenders & third parties charge and are related to your home purchase. Typically, you owe the lender the down-payment on your home, the principal amount & the mortgage-related interest. In addition to all of these, you will also owe the lender & third parties a mortgage closing cost. In most instances, it is the home-buyer who has to pay the closing cost and not the buyer. However in some types of loans like the VA loans, the seller will also pay a part of these costs.

The Included Charges

There is always a wide variation in closing costs based in the property you buy and the area you live in. In most cases, closing costs include:

  • Fee for running the credit report

  • Loan-origination fee, that the lender charges for processing all the loan paperwork

  • Attorney’s fees

  • Appraisal fee

  • Charges for inspection required/requested by you or the lender

  • Discount points- These are the fees you pay in lieu of a lower interest-rate

  • Survey fee- this covers the property lines verification costs

  • Title search fee- This pays for the title background check which is conducted to ensure that there are no tax liens or unpaid mortgages on the property

  • Pest inspection fee

  • Title insurance- This protects the lender in the event that the home title isn’t clean.

  • Escrow deposit- This might pay for a couple of months’ property taxes & private mortgage insurance.

  • Recording fee- this is paid to a county/city in exchange for recording the necessary new land records

  • Underwriting fee- This covers cost of evaluating the mortgage loan application

How Can Closing Costs be Avoided by Home Buyers?

If you want to avoid the upfront closing costs, you should opt for a no closing cost-mortgage. In this type of mortgage, you do not have to pay any fees at closing. When any lender offers this kind of deal, you will end up paying for it in the long-term. The lender might charge a much higher interest-rate on your loan as you have not paid the closing costs.

Sometime the lender might include the closing costs into the mortgage that is owed. Sometimes, home buyers might be able to negotiate with the seller about who pays the closing costs. Contact Mortgages Done Right Inc. at (561)777-7622 for additional information about closing costs and other mortgage approval processes.