Many home buyers are curious about the types of fees that are involved with buying a home and specifically for financing a home purchase, so I have put together a list of the 8 most common fees to expect at closing. Some of these fees will depend on the buyer's situation and may or may not be required by the lender, but this is a great place to start when you begin to plan for your home purchase.
8 Most Common Fees to Expect at Closing
1. PROPERTY TAXES – The amount you pay will depend on the month you close because property taxes will be pro-rated between the buyer and the seller.
2. HOMEOWNER’S INSURANCE – Home buyers are required to pay for an entire year’s premium of homeowner’s insurance (also called hazard insurance) at closing.
3. PREPAID INTEREST – The amount you pay will depend on the day of the month that your home loan closes. This fee can vary from a full month’s interest to only a few days worth of interest.
4. PRIVATE MORTGAGE INSURANCE (PMI) - Some buyers will have to pay PMI but this will depend on the amount of your down payment. If you meet the minimum required down payment then you will not have to pay for PMI, otherwise there will be a charge for PMI that will be placed in an an escrow account.
5. TITLE INSURANCE FEES - These charges will cover the buyer’s title policy and also the lender’s title policy (ALTA). The title company may have other fees associated with title search, settlement, recording, notary, document preparation, and/or title examination fees. These fees will vary from title company to title company.
6. ADMINISTRATIVE, LOAN PROCESSING, AND UNDERWRITING FEES - All of these fees are charged by the lender and will vary from lender to lender so it is important to shop around. These fees are charged for processing your loan request, gathering all of the required documentation, and evaluating your home loan application package.
The fees listed below may also apply to your situation, however they are not standard fees across the board for all home buyers.
7. LOAN ORIGINATION FEE - This is a fee that is charged by the lender for administrative costs involved with creating or “originating” the new loan. This is typically expressed as a percentage of the total loan amount.
8. LOAN DISCOUNT/POINTS - These are typically referred to as points in the mortgage world which is just another term used to describe a fee paid for by the buyer to lower their interest rate. One point is equivalent to 1% of the loan amount.
As a full-time, experienced Realtor living and working in the areas of Queen Creek Real Estate and San Tan Valley Real Estate, I am always available to answer your real estate related questions. If you are interested in buying or selling a home in Queen Creek or San Tan Valley Arizona, or if you would simply like a FREE market analysis of your property, then please do not hesitate to contact Karen Berg at 602.919.2375.
Of course I’d love to help you any time you need to buy or sell, but I’m also here for you any time you have a question about the real estate market. You can also feel free to call if you’re simply curious about the listed or sold price of a house down the street. I’m looking forward to hearing from you soon!
Queen Creek Realtor
21321 E Ocotillo Rd C108
Queen Creek, AZ 85142
Blog post originally published at: http://queencreekrealestatesite.com/blog/queen-creek-real-estate-8-most-common-closing-fees/