CLOSING COSTS FOR BUYERS
Closing costs are fees associated with your home purchase that are paid at the closing of a real estate transaction. Closing costs vary widely based on where you live, the property you buy, and the type of loan you choose. In this article we outline closing costs when you purchase a home with financing.
Typically, home buyers will pay between about 2 to 5 percent of the purchase price of their home in closing fees. Here is a list of fees that may be included in closing.
Application Fee:This fee covers the cost for the lender to process your application.
Loan Origination Fee: which lenders charge for processing the paperwork for your loan.
Credit Report Fee: for running your credit report.
Underwriter Fee: for the underwriter, who assesses your credit worthiness.
Home Appraisal: of the property you hope to own to make sure its value matches the size of the loan you want.
Title Search: to unearth any liens on the property that could interfere with your ownership of it.
Private Mortgage Insurance (PMI): If you’re making a down payment that’s less than 20% of the home’s purchase price, chances are you’ll be required to pay PMI. If so, you may need to pay the first month’s PMI payment at closing.
Homeowners’ Insurance: This covers possible damages to your home. Your first year’s insurance is often paid at closing.
Survey Fee: if it's a single-family home or town home (but not condos).
Taxes: also called stamp taxes, on the money you've borrowed for your home loan.