Ask
your lender to give you a written estimate of your closing costs. This area can get quite
confusing. Have your mortgage officer explain all financing charges. It
may be worth your time to shop at a few different banks to get the best deal.
Fees
change according to the loan type you choose. Some apply to VA loans (were you a
veteran?)... or FHA loans (are putting as little as 3% down on an FHA
loan?)... or 'no money down' (your $500-$1,000 earnest money is the only money you bring
to the table). Check with your banker to find out how your closing costs will vary with
each loan type.
Don't
let these expenses intimidate you. Many of them can be written into your loan. If you're
buying a $100,000 home. Your loan might go up to $107,000 with the closing costs. You'll
just pay a little extra on the mortgage payment each month. It is normal to write closing
costs into your mortgage..
Click
here to see the types of mortgages available to buyers.
Origination fee for a conventional (bank) loan - 1% of the loan amount
Appraisal fee (all loan types) - $300 - $400
Title
insurance (all loan types) - approximately $500 (talk to your lender since an owner's
policy is optional)
Plat
drawing (all loan types) - $65
Recording
fees (all loan types) - up to $100
Name
and judgment search (all loan types) - $35
ARM title insurance endorsement fee - $50 (applies only to conventional ARM
mortgage loans)
Mortgage
registration tax (all loan types) - (MN) $2.65 per $1,000
Settlement
closing fee (VA) - The VA will not allow the buyer to pay the closing fee for a VA
mortgage; it must be charged to the seller
Discount
points - Optional. Discount points are paid to buy down the interest rate. Each discount
point equals 1% of the loan amount (example: 1 point on a $40,000 loan = $400.
Calculated this way: loan amount x 1%)
Commitment
tax service fee - approximately $200 (not charged on VA mortgages)
VA
funding fee - 1.25% of the loan amount with less than 5% down, .75% with at least 5% down
but less than 10% down, and .50% with 10% or more down
Additional Fees
The
daily interest on new mortgages from the day of closing through the end of the month will
be collected at closing
One
full year of homeowner insurance must be paid prior to closing and a receipt must be
brought to closing
Private mortgage insurance is usually required on all
conventional loans if the buyer makes less than a 20% down payment
Two months of homeowner insurance is collected at
closing to start an escrow account. This account is maintained in addition to payment in
advance for a one year policy
If private mortgage insurance is used with a
conventional loan, two months of the renewal premium is collected to open the escrow
account
Flood insurance is required if the property is located
in a specified flood zone. A full year's premium is required, usually with two additional
months for the escrow account
Again, talk to your friendly banker (or click below to
find a banker). They'll give you an estimate of how much home you can afford.
Check with your lender for their
specific charges...
FREE Reports to Help You Buy:
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