What are non-recurring and recurring closing costs?
This is a question a lot of (especially first time home buyers) are struggling with and a question I hear often from my clients. Closing costs will differ from location to location but typically range between 3% to 5% of your loan amount.
Non-recurring closing costs are charges or fees which happen only one time (non recurring). Samples of non-rucurring costs are:
- escrow fees
- sub-escrow fees
- title insureance policy
- recording fees
- document preparation fees
- notary fees
- loan origination
- loan discount points (even elected)
- wire fees
- funding fees
- messenger/courier/overnight fees
- loan tie-in fee
- underwriting fee
- credit report
- inspections
- Appraisal
Remember: anything you only are charged once during the process of purchasing a home.
Recurring closing cost are the oposite of non-recurring closing costs and include
- property taxes
- interest
- fire/flood and/or home owner insurance
- homeowners association fees
- mortgage insurance
Remember: any fees or charges that are paid more than once.
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