A down payment is not the only thing you need to have when closing on your loan. Closing costs are expenses you pay the lender for the various services they provide for the approval of your mortgage.
Let’s dive into what closing costs are and how much you can expect to pay.
Closing costs are processing fees and charges that you pay to your lender to cover the costs of services rendered for creating and finalizing your loan. These cover your home appraisal, origination and underwriting of a mortgage loan, taxes, real estate commissions, insurance premiums, and record filings to name a few.
Closing costs are usually about 3% to 6% of the price of your home. This means that a loan worth $200,000 can cost you between $6,000 to $12,000 in closing costs.
Buyers and sellers pay closing costs but the majority are usually shouldered by the buyer. You can negotiate with your seller to help cover closing costs.
Lenders will provide you with an itemized list of closing costs with your loan estimate. Here are some of the common fees and charges you can expect.
Lenders may use attorneys to prepare and review home purchase agreements and contracts.
Lenders usually charge a fee to process your mortgage application.
This will amount to about $15 to $30 to pull your credit from the three main reporting bureaus.
This fee covers the cost of moving the burden of HOA fees from seller to buyer. This ensures that the seller is up to date on their HOA dues.
Lenders usually ask for a year’s prepayment of homeowners insurance premium during closing.
This protects a lender if an ownership dispute or lien comes up that wasn’t found during the title search. You pay a one-time fee to the title company upfront.
Title insurance is optional but recommended. This policy protects you in case someone challenges your homeownership. Expect to pay 0.5% to 1% of the purchase price for your policy.
This fee covers the lender’s administrative costs to process and underwrites your loan which is usually 1% of the loan amount.
If you put down less than 20% your lender may require a PMI which means you may pay for the first month’s PMI payment upon closing.
There are instances where you need to check property loans and shared fences to ensure a property’s boundaries. You pay a fee to a surveying company which costs around $300 to $500.
Closing costs can’t be avoided when buying a home. If you want to know how to save on fees and other charges from closing costs get in touch with one of our loan experts to know more.
Give us a call or send us a message on our website for a free consultation.
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 260095
12905 Oak Lawn Place
Herndon, VA 20171
Phone: (703) 860-3141
Mortgage Advisory Group, Inc. strives to ensure that its services are accessible to people with disabilities. Mortgage Advisory Group, Inc. has invested a significant amount of resources to help ensure that its website is made easier to use and more accessible for people with disabilities, with the strong belief that every person has the right to live with dignity, equality, comfort and independence.
Mortgage Advisory Group, Inc. makes available the UserWay Website Accessibility Widget that is powered by a dedicated accessibility server. The software allows mortgageadvisorygroupinc.com to improve its compliance with the Web Content Accessibility Guidelines (WCAG 2.1).
Mortgage Advisory Group, Inc. accessibility menu can be enabled by clicking the accessibility menu icon that appears on the corner on the page. After triggering the accessibility menu, please wait a moment for the accessibility menu to load in its entirety.
Mortgage Advisory Group, Inc. continues its efforts to constantly improve the accessibility of its site and services in the belief that it is our collective moral obligation to allow seamless, accessible and unhindered use also for those of us with disabilities.
Despite our efforts to make all pages and content on Mortgage Advisory Group, Inc. website fully accessible, some content may not have yet been fully adapted to the strictest accessibility standards. This may be a result of not having found or identified the most appropriate technological solution.
If you are experiencing difficulty with any content on Mortgage Advisory Group, Inc. website or require assistance with any part of our site, please contact us during normal business hours as detailed below and we will be happy to assist.
If you wish to report an accessibility issue, have any questions or need assistance, please contact us by sending an email to: firstname.lastname@example.org