When buying real estate in Colorado Springs, the closing is the last step. It is the process of passing ownership of property from the seller to buyer. As a buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Here are some common fees:
Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the 
beginning of your loan application process.
Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.
Loan Origination Fee: This fee covers the lender's loan-processing costs. The fee is typically one percent of the total mortgage, but varies from lender to lender.
Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.
Prepaid Interest Fee: This fee covers the interest payment from the date you purchases the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.
Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance.
Recording Fees and transfer taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property.
Keep in mind that you can negotiate these costs with the seller during the offering stage. In some instances, the seller might even agree to pay a portion of all of the settlement costs.
The original article was posted at: What are closing costs in real estate?
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