Closing Costs

Closing costs are all the different charges that you’ll be required to pay at or before the closing, they include charges related to the purchase of your home, and charges related to getting a mortgage. Depending on the specific circumstances of your particular loan, closing costs typically run between three and five percent of the loan amount.

Charges by the lender include:

• Application fees
• Points and origination fees
• Charges for appraisals and credit reports

Charges collected by the title company or settlement agent include:

• Title insurance fees
• Real estate tax on the mortgage
• Homeowner's insurance reserves
• Charges for filing documents with the county clerk
• A settlement fee for handling all the paperwork to close your loan. In a purchase, some of these costs may be shared with the seller.

There may be other charges for services provided by either your lender or the closing company. Your lawyer and the contact person with your lender can give you more specific information on these costs. Remember, when you budget for your purchase, you should be including prepaid and closing costs, in addition to the purchase price, so that you can be sure that you can afford the house.

TIP:	To decrease the amount of money you'll need to pay at closing, ask to schedule the closing at the end of the month.

For example: If you close on January 31st, your first payment will still be March 1st, but you'll only need to pay the interest for that one day at the time of closing. Your first payment will only be a month and a day away, instead of almost two months away, but you’ll need less money at the closing.

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