Closing Costs Part 1

There's an old saying, "If it's too good to be true, it probably is!" Such is the case with refinancing or purchasing a home and the topic of closing costs. Many lenders in the industry will claim NO CLOSING COSTS, however, everyone actually plays on a level playing field! The only difference between mortgage companies are the investors and/or banks that they are individually approved with, that's it! Closing costs are ALWAYS going to be associated with refinancing or purchasing a home. Why? There are many parties involved in the loan process and obviously, no one works for free!

First of all, what are typical closing costs?

Loan Origination Points~Amount paid to lender for helping you obtain financing.

Appraisal Fee~Paid to appraiser for calculating the estimate value of the subject property.

Credit Report Fee~Fee to run your credit report to see your payment history and credit scores.

Processing Fees~Processors handle the paperwork of your loan and streamline the process.

Underwriting Fees~Paid to the investor for paperwork and clerical costs incurred on their end.

Recording Fees~For getting the deed to the property recorded with the county.

Notary Fees~A notary is licensed by the state to witness the signing of your loan documents. Mobile notary service is available to have you sign docs in the comfort of your own home!

Title Fees~Title Insurance protects you and your lender in the event that there is a discrepancy in the chain of title,boundary line discrepancies, etc.

Escrow Fees~Escrow acts as the money handler in the transaction and sees that all parties are paid properly.

Homeowner's Hazard Insurance~This policy protects you in the event that there there is a flood,fire,robbery,etc.

Home Inspection Fees~Home inspectors fees apply to purchasing a new home, allowing the inspector to look at the property and inform you of any defects in the home.

Loan Discount Points~Loan discount points apply to paying the bank more money up front to "buy down" your interest rate to a rate lower than the "prevailing rate."

Scott Gormley
Broker/Owner
Oak Valley Mortgage
2006 Chico Assoc. of Realtors Affiliate Chairman
Direct: 530.592.8362
Fax: 530.267.5555
Website: http://www.CALoan.com

"You find the perfect home, we'll find the perfect loan!"