Closing costs are fees associated with your home purchase that are paid at the closing of a real estate transaction. Closing is the point in time when the title of the property is transferred from the seller to the buyer.
Closing costs vary widely based on where you live, the property you buy, and the type of loan you choose. This list is detailed with possible fees that you may see, but it’s not likely that your loan will include all of the fees below.
Title insurance– this is insurance for the owner and lender to ensure that you are the only owner of the home and that the lender’s mortgage is a valid lien.
Origination fee– this covers the lender’s administrative costs. It’s usually about 1 percent of the total loan but you can sometimes find mortgages with no origination fee.
Inspection– home buyers will likely get their own home inspection to verify the condition of a property prior to closing. This fee is paid at time of inspection.
Homeowners’ Insurance: This covers possible damages to your home. Your first year’s insurance is often paid at closing.
Appraisal: This is paid to the appraisal company to confirm the fair market value of the home. This is scheduled by your lender. You will pay for the appraisal at the time it is ordered.
Closing Fee or Escrow Fee: This is paid to the title company, escrow company or attorney for conducting the closing. The title or escrow company oversees the closing as an independent party in your home purchase.
Termite Inspection: This fee covers the cost to inspect for termites or existing termite damage, which is required in some states and required for government loans.
These are just a few of the possible fees that you may see during a closing. The good news is that your lender will provide estimates for these costs prior to closing, once you apply for your mortgage!
Our agents at Select Properties work with local lenders to ensure that our clients avoid any big surprises, while securing the best possible deal for you. If you have any questions, feel free to call us today!