What Are Closing Costs? Is There a Way to Estimate Them?
Closing costs are various fees that are paid at the closing of your mortgage. Depending on the state you live in, the closing is where you’ll sit down with the seller and those involved in the home buying transaction, such as real estate brokers and lawyers, and you will sign all the paperwork and remit payments that officially transfer home ownership to you.
You’ll walk out with the keys… and a bit less money in your bank account.
What Do Closing Costs Include?
Closing costs vary by lender, by mortgage program and by geographic area. However, they typically* consist of some or all of the following:
- Broker Fee (if applicable)
- Attorney Fees
- Appraisal Fees
- Underwriting Fee
- Title Recording Fee
- Title Insurance
- Notary Fee
- Survey Fee (if needed)
- Document preparation fees
- Pre-paid property taxes, mortgage interest, and homeowners insurance
- Pre-paid private mortgage insurance (if required)
- Flood insurance (if required)
- Loan Discount or ‘Points’ (which are one-time fees charged to provide you with a lower interest rate on your loan).
*Please note that while the fees listed above are commonly included in closing costs, this list is not all-inclusive and closing costs will vary by individual. Other charges not listed here may also be included in your closing costs.
Estimating Closing Costs
Closing costs can be pretty expensive, so it’s important to have a good idea of what these costs might be well before you plan to close on your new home!
Closing costs generally range between 2 to 7 percent of the sale price. You can get an estimate of what the costs will be during your mortgage process. Some lenders even provide you with a good faith estimate of closing costs, which lists the fees that you will be required to pay.
Understanding Closing Costs When Purchasing a Home
Figuring out closing costs – and the entire process of obtaining a mortgage and purchasing a home – can be daunting! With so many steps and lots of complexities to understand, it can be helpful to work with a trusted mortgage lender that will guide you every step of the way.
Looking for a mortgage lender you can trust? Look no further than Maple Tree Funding! Our trusted team of mortgage professionals can help you understand each phase of the mortgage and home buying process. We’ll make sure you are well prepared and aware of your closing costs before you get to the closing table to make the final purchase!
Interested in learning more about the closing costs associated with home purchases and refinances? Give us a call today at 518-782-1202 or contact us online today! We can help you to understand all aspects of the home buying process and find the mortgage option that fits you – and your budget – best.
Other Helpful Resources:
As you prepare to close on your new home, you may also be interested in the following resources:
What Documents Do You Sign at a Home Closing? – Understand the documents you’ll be signing at your closing, and what they mean, so you’re well prepared for closing day!
What’s Included in My Monthly Mortgage Payment? – Find out what costs and expenses are covered as part of the mortgage payment you make each month once you’ve closed on your home.
Editor’s Note: This content was originally published in 2014 but has been updated as of September 2020.