The Complete Guide To Closing Costs

Closing costs are fees associated with obtaining a mortgage loan, and they can vary depending on the lender and the type of loan. These costs can include, but are not limited to:

1. Origination fee: This is a fee charged by the lender for processing the loan.
2. Appraisal fee: This is a fee charged by the lender to have a professional appraiser evaluate the value of the property.
3. Credit report fee: This is a fee charged by the lender to obtain a credit report on the borrower.
4. Title insurance fee: This is a fee charged to protect the lender and the borrower against any claims or disputes over the title of the property.
5. Survey fee: This is a fee charged to have a professional survey the property to ensure there are no boundary disputes or other issues.
6. Recording fee: This is a fee charged by the government to record the new mortgage and transfer of ownership with the local property records office.
7. Underwriting fee: This is a fee charged by the lender for evaluating the borrower’s creditworthiness and ensuring the loan meets the lender’s guidelines.
8. Closing or Escrow fee: This fee is paid to the title company or attorney for handling the closing process, it is usually a flat fee and varies by state.
9. Pre-paid Interest: Interest that accrues from the date of closing to the first mortgage payment date.
10. Property Tax and Insurance: These are payments that are typically escrowed by the lender and paid in advance to cover future property taxes and insurance payments.

It’s worth noting that closing costs can vary depending on the lender and location, and some of these costs may be negotiable or waived in certain situations. It’s important for borrowers to review the costs and terms of their mortgage loan and ask questions about any fees they do not understand.