Home
>
Buyer's Guide >
Closing
> Costs
Common Closing Costs for Buyers
The lender must disclose a good faith
estimate of all settlement costs. A check to cover your closing
costs will probably have to be a cashier’s check. The title company
or other entity conducting the closing will tell you the required
amount for:
§
Downpayment
§
Loan origination fees
§
Points, or loan
discount fees, you pay to receive a lower interest rate
§
Appraisal fee
§
Credit report
§
Private mortgage
insurance premium
§
Insurance escrow for
homeowners insurance, if being paid as part of the mortgage
§
Property tax escrow, if
being paid as part of the mortgage. Lenders keep funds for taxes and
insurance in escrow accounts as they are paid with the mortgage,
then pay the insurance or taxes for you.
§
Deed recording fees
§
Title insurance policy
premiums
§
Survey
§
Inspection
fees—building inspection, termites, etc.
§
Notary fees
§
Prorations for your
share of costs, such as utility bills and property taxes
A Note About Prorations:
Because such costs are usually paid on either a monthly or yearly
basis, you might have to pay a bill for services used by the sellers
before they moved. Proration is a way for the sellers to pay you
back or for you to pay them for bills they may have paid in advance.
For example, the gas company usually sends a bill each month for the
gas used during the previous month. But assume you buy the home on
the 6th of the month. You would owe the gas company for
only the days from the 6th to the end for the month. The
seller would owe for the first five days. The bill would be prorated
for the number of days in the month, and then each person would be
responsible for the days of his or her ownership.
Reprinted from REALTOR Magazine Online by
permission of the National Association of Realtors
Copyright 2005 All Rights Reserved
www.REALTOR.org/realtormag
|