Mortgage Info

Closing Costs

The bundle of fees associated with the buying or selling of a home are called closing costs.
Certain fees are automatically assigned to either the buyer or the seller; other costs are either
negotiable or dictated by local custom.
Buyer closing costs
When a buyer applies for a loan, lenders are required to provide them with a good-faith estimate
of their closing costs. The fees vary according to several factors, including the type of loan they
applied for and the terms of the purchase agreement. Likewise, some of the closing costs,
especially those associated with the loan application, are actually paid in advance. Some typical
buyer closing costs include:

•        The down payment
•        Loan fees (points, application fee, credit report)
•        Prepaid interest
•        Inspection fees
•        Appraisal
•        Mortgage insurance
•        Hazard insurance
•        Title insurance
•        Documentary stamps on the note

Seller Closing Costs

If the seller has not yet paid for the house in full, the seller's most important closing cost is
satisfying the remaining balance of their loan. Before the date of closing, the escrow officer will
contact the seller's lender to verify the amount needed to close out the loan. Then, along with
any other fees, the original loan will be paid for at the closing before the seller receives any
proceeds from the sale. Other seller closing costs can include:

•        Broker's commission
•        Transfer taxes
•        Documentary Stamps on the Deed
•        Title insurance
•        Property taxes (prorated)