What Are My Closing Costs Going To Be?

What Are My Closing Costs Going To Be?

Once you have decided on a lender and made a loan application, the lender must provide you with a good faith estimate of closing costs. This is only an estimate because some costs can change depending on issues, changes in terms and prorations determined by the day of the month you close.

Closing costs, also known as settlement costs, are not included in the price of the property you buy. They are paid separately when the transaction closes and go to cover a number of services involved in selling the property. Closing costs less if you are paying cash for the property. Costs associated with taking a mortgage can be up to seven percent of the total price of the property.

A few days before the actual closing, the title company will tell you the exact amount required for closing submitted to you and/or your real estate agent as a HUD statement. The check you bring to closing will need to be a bank check, not a personal check.

Common Closing Costs

Usually paid for before you close

• Downpayment - often partialy paid with balance at closing
• Loan Discount Points - a 1-time fee to discount interest rate
• Credit Report - to make certain you have good credit
• Inspection Fees - building inspection, radon tests, lead paint inspections, septic sysyems, water quality, pests, etc

Paid at Closing with Bank Check

• Balance of Downpayment - if balance is due
  
• Loan Origination Fee - Often 1% of your mortgage
• Underwriting Fee - for loan review before approval
• Appraisal Fee - covers the required appraisal of your property
• Private Mortgage Insurance Premium (PMI) - if less than 20% down payment
• First Month's Interest on the Mortgage - paid in advance
• Homeowners Insurance Premium - hazard insurance
  
• Mortgage Insurance - for a variable number of months
• Deed Recording Fees
• Title Insurance Policy Premiums
• Survey - if needed or required
• Property Tax - Current property tax prorated for what has been paid or due
• Title Insurance Coverage - owner's coverage to protect your title and lenders coverage to protect their collateral
• Notary Fees - to witness and notorize certain documents
  
• Attorney Fees - if you used an attorney to handle any issues
• Association Fees - prorated if applicable
  
• Broker's commision - varies but often 6% of sales price paid by the seller
• Deed Preperation - paid by the seller
  
• Title Insurance Binder - paid to title company to insure you buy insurance from them
  
• Title Company Fees - for abstract of title search, title examination, document preperation and cost to close the transaction
• Transfer Taxes in NH - which are $15 per 1000 of the purchase price. Half is paid by the buyer and half by the seller
  
• Property Tax Escrow - if your loan requires it

Paid at or Before Closing - Personal Check OK

• Oil and/or Gas Proration - for what's left in the tanks
• Personal Items - that you want from the sellers
• Prepaid Service Agreements - if new owner wants to continue the same service

This information is offered to you by:

Although we believe that this information is accurate as it is compiled from professional sources, please verify this information on your own before relying on it as your only source of knowledge to base any decisions on.