what is closing cost

Closing costs for a buyer include the application fee, which sometimes also pays for the appraisal, credit report fee, flood certification fee, title search and some other misc. lawyers costs. Sometimes your loan may require your taxes and insurance to be included with your monthly payments and they set up an escrow for the taxes and insurance to be paid once it is due again in a year from closing. you will be paying into it at closing maybe 2-3 months to get a cushion going in the account. You could be looking at $2500 to $3500 in costs depending on which bank and loan you get. You can also ask the seller to help pay your closing costs which is very common now. You can ask for all of them to be paid if the seller is willing to do it. You put this in writing in the purchase agreement!

Closing costs on home loans cover all the costs from all the different parties involved in getting the loan, from appraisers, the credit bureaus, title company, state and county taxes, and finally the lenders costs. Next you have pre-paid items, which include one time pro-rated property taxes on the house you are buying, and paying for the first years home owners insurance up-front. All of this can really add up. Sometimes even more than your down payment! Next, you can choose to pay them out-of-pocket, try to roll them into the loan itself with something known as seller paid closing costs. I hate that name, because it sounds like it is free to you, but it is not. The amount is just added to what the seller wants for the house, so you pay over time versus out-of-pocket today. The last way is with something known as lender credits. All lenders can lower the amount you need to pay for closing costs by INCREASING the loans interest rate. A little reduction in closing costs, by maybe doing a no lender origination fee option only increases the interest rate about 1/4%, while a full no cost loan increases the interest rate significantly more. Any lender saying they don't charge a standard cost, or offering anything free, like a free appraisal, is simply raising your interest rate to pay for it - but not telling you. Finally, about 1/2 of the closing costs are the same regardless of home much loan you are getting, while the other 1/2 of closing costs are based on the loan amount. So you need to contact a local lender in your area to get a quote on rate and costs, then discuss options, like no origination fees, before you can get an accurate idea of costs. Anyone saying closing costs are a certain amount of the loan is simply wrong. For loans on properties in MN, WI, and SD, you can reach me at my web site at JoeMetzler.com.

Closing costs are the charges necessary to facilitate the finalizing of a mortgage loan. When you buy or refinance a home, there are certain fee's that need to be paid for.. these fee's are typically grouped together and called "Closing Costs".. Appraisal fee, credit report fee, title insurance and escrow fee's, recording fees, etc, etc, etc.. these are all considered closing costs.. Depending on whether or not you are buying or refinancing, and the area/state you are in will determine what those fee's are.. Certain fee's are "Fixed",, meaning whether you're financing $500K or $100K the cost is the same.. other fee's are "Variable" Fee's.. meaning they are based on a percentage of the sales price or loan amount.. I hope this helps.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893