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Common Closing Costs for Buyers
24 Hour Recorded Information on
What Closing Costs You Can Expect!
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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:
- Down payment
- 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 fee
- 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.
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