When you use aback to purchase a home and take out a mortgage with them, there are fees the bank charges and fees they require to be paid to third party vendors in connection with the mortgage. There are also insurance costs and attorney’s fees. Check out this article to see a breakdown of costs associated with the mortgage.
What charges go into your total closing costs?
Closing costs vary widely based on where you live and the property you buy. Closing costs often include things such as:
A fee for running your credit report.
A loan origination fee, which lenders charge for processing the loan paperwork for you.
Charges for any inspection required or requested by the lender or you.
Discount points, which are fees you pay in exchange for a lower interest rate.
Survey fee, which covers the cost of verifying property lines.
Title insurance, which protects the lender in case the title isn’t clean.
Title search fees, which pay for a background check on the title to make sure there aren’t things such as unpaid mortgages or tax liens on the property.
Escrow deposit, which may pay for a couple months’ property taxes and private mortgage insurance.
Pest inspection fee.
Recording fee, which is paid to a city or county in exchange for recording the new land records.
Underwriting fee, which covers the cost of evaluating a mortgage loan application.
How much will you pay in closing costs?
Typically, home buyers will pay between about 2 and 5 percent of the purchase price of their home in closing costs. So, if your home cost $150,000, you might pay between $3,000 and $7,500 in closing costs. Most of the time, it is the home buyer who pays the closing costs, rather than the seller, though on some loans such as VA loans, the seller pays a portion of these costs.
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