Closing Costs

 When getting pre-approved they will provide to you with a loan ESTIMATE that should disclose closing costs. You then go find a house, put in an offer, get it under contract, and get a loan APPROVAL; this is when all of your unexpected expenses start to pop up!  These expenses are separate from the purchase price of the property, and/or your down payment. These fees are paid to the lender, or a third party vender the lender would recommend. You are NOT required to use the recommended third party vender, please consider shopping around to find the right vender for you (in a way to cut down closing costs). Some expenses considered in the “Closing costs” when buying are:

Origination fee-covers the lenders administrative costs to process application

Underwriting fee-final loan approval process fee

Points-or also known as “discount points”, upfront payments made to lender to reduce interest rate (consider how much each point costs, to the difference it makes in monthly mortgage payments-is it worth it?)

Prepaid interest charges-upfront payment of interest gained between closing and when your first mortgage payment is due

Appraisal fee-paid to a professional that comes out and assesses the houses fair market value (to determine your loan to value ratio)

Inspection fee-paid to a professional who comes and inspects the physical structure and systems of the house (from the roof to the foundation)

Lead-based paint inspection fee-inspectors fee to determine if there is any hazardous lead paint

Survey fee-fee paid to a professional to check and confirm property lines/boundaries, and shared fences

Attorney fee (is additional in some states like N.Y.)-fee charged by your real estate attorney to review all contracts

Escrow fee-fee charged to open up and/or create an escrow account for future payments (example taxes and/or property insurance)

Title search fee-charged by the title company to search public property records to ensure there are no outstanding liens or judgments on the property

Lender title insurance fee-onetime fee paid to the title company to secure lender on any previous liens or judgements on the property

Owners title insurance-insurance to cover if anyone that might challenge you on ownership, as well as protects you from previous liens on property by previous owners

Homeowners insurance-cost to gain homeowners insurance for the property (12 months usually required upfront)

Property Taxes-local taxes are due at closing (if not within 60 days of closing)

Tax monitoring fee-paid to keep track of tax payments, and report any missed or late payments to lender

Recording fee-paid to record public land records (if not paid and recorded you are NOT the owner of that property)

Broker/Agent commission-paid to the broker/agent that helped guide you in locating the property, put in an offer, and assist you with all purchasing details