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Costs of Closing

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By : Sonia Smith    99 or more times read
When you purchase a home, you not only have to prepare for the down payment, you also have to pay the lender for closing costs. Mortgage lenders normally give you a good faith estimate or GFE of the costs of closing you will incur.

Either the seller or the buyer will shoulder the costs of closing or they can both shoulder it. The amount covered by each depends on what is decided or negotiated earlier in the purchase. Here are things to expect for closing costs.

  1. Origination or point fees which is equal to one percent of the whole loan amount.

  2. A mortgage broker fee or fees include broker-processing fees.

  3. A tax service fee helps the lender make certain that you are on track with our tax payment and protect their investment.

  4. A credit report fee costs up to $60. It is routine where the lender pulls your credit report in order to approve your loan.

  5. You have to pay a considerable amount for documentation preparations done by the mortgage lender.

  6. Most mortgage lenders will charge service fees for processing transfer of check payments to wired payments from banks.

  7. Appraisal fees are fees to be paid to the appraiser who will inspect the property. It is a vital part in your loan application because it informs the lender of the worthiness of the property that they are letting you loan in order to purchase.

  8. A flood certification fee is paid to a company to find out if the potential property is located in a federal zone area.

  9. A title insurance fee is for the research involved in the home’s history and the insurance policy is drawn to protect both lender and borrower from any future losses due to claims against the property or its title.

Other fees to consider include application fees, appraisal fees, title search, escrow, survey, buyer and lender attorney’s fees, taxes and certifications that should be bought. More fees include administration fees, inspection fees, appraisal fees and underwriting fees.

The division of these fees between the seller and the buyer is entirely a matter of negotiating, thus do not hesitate to bring up the costs of closing during negotiations on the home offer.

Generally, the closing costs are an annoying yet integral aspect on a home sale that could quickly add up. For more details about what you should expect for the costs of closing, make sure to negotiate properly before you agree on anything. Make sure that you put everything in writing.

The best way for you to avoid excessive payments on the closing costs is to shop around for several lenders and find out what various lenders have to offer and what they are charging. Make it a point to compare at least three lenders so you will be able to choose one that does not only fit your needs but your budget as well.

Make a thorough research to be able to save more money for your dream home!
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