Closing Costs

There are certain standard costs associated with closing the sale or refinance of a house. These fees are split between the buyer and the seller, as spelled out in the sales contract or paid entirely by the borrower in the case of a refinance.

The Realtor will negotiate the sales contract for you, they will not only work to get the sales price you want, they can also work to limit the number of closing costs for which you will be responsible.

I will walk you through the closing costs, answering any questions you may have explaining which costs are decreed by law to be yours and which are negotiable.

Good Faith Estimate

Buyers will receive a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. The estimate is based on the loan officer's past experience and may not include all the closing costs. I will be glad to review the "Good Faith Estimate," answering questions and highlighting missing costs and estimates I believe to be low if you would like to provide a competitor Good Faith Estimate.

• Attorney's/Escrow fees
• Owners Title insurance
• Lenders Title insurance
• Transfer tax (Purchase transactions), only applicable in certain states
• Texas Guarantee fee - Texas only
• Courier Fee

• Property survey (Purchase transactions)
• Termite inspection (typically associated with a VA purchase)
• HOA transfer fee
• Document Recording fees

• Prepaid interest (interest that accrues between closing and the end of the closing month)
• Homeowner's insurance
• Escrow account set up -

Anticipating Closing Costs
We will of course supply you with a detailed analysis of your fees in a Good Faith Estimate.  We will also supply you with a Truth in Lending form, which will provide you with a disclosure estimating the costs of the loan you have applied for, including your total finance charge and the Annual Percentage Rate (APR). The APR expresses the cost of your loan as a yearly rate.  The items you see here are most of the costs incurred, any other fees will be fully disclosed in the Good Faith Estimate which you will receive as soon as possible, and no later than three days after applying for your loan.

Various fees explained:

Origination Fees & Discount Points
The origination fee is charged for the lender's work in evaluating and preparing your mortgage loan. Discount points are a fee you can pay to “buy” a lower interest rate – the more points paid, the lower the rate. One point equals one percent of the loan amount. For example, one point on a $300,000 loan would be $3,000. In some cases - especially with refinances – you can add the points to your loan amount, thus not having to pay points out of your pocket.

Appraisal Fee
This fee pays for an independent appraisal of the home you want to purchase. The lender requires this opinion or estimate of the market value of the house for the loan. We have many qualified appraisers available to help.

Credit Report:
A credit score (link) number is often called a FICO score. The score distills all of the information in your credit report (link), using a formula to calculate a single number that indicates your credit worthiness.

Escrow Account Set Up:
Lenders will require you to establish an account held by them to pay your taxes and insurance bills when they are due.  Normally the account will be established by taking the month the loan is closed and adding 2-3 months worth of cushion so that the account will have sufficient funds to pay the bill when it is due.  If the borrower is putting 20 percent or more down, an escrow waiver may be requested.  An escrow waiver may be granted at the lenders discretion and normally at a charge of 0.25% of the loan amount.

Underwriting and Documents Fees
Lenders must underwrite your file in order to see if it meets their lending requirements and the requirements of the companies who ultimately purchase loans for investment purposes.  They then must produce a viable set of loan documents meeting strict Us and state laws

Processing Fee
This fee is for setting up your file, all internal work and for procuring all documentation required to make your loan viable for the lender criteria, and for following up to be sure your loan funds at the proper loan amount, fees and closing date.

Title and Escrow fees
These fees may vary by jurisdiction; often includes the cost of title insurance or title search and attorney's title opinion; may cover premiums for the lender's policy (insuring that its mortgage is a first lien on the property) and a separate policy insuring the buyer's title

Transfer Tax
Transfer taxes are state and local taxes that are assessed on real property when ownership of the property is transferred between parties. Documentary stamps are purchased covering such charges and are place on the deed.

Property Survey
The surveyor determines whether the house is within the property borders, whether there are any encroachments on the property by neighbors and the extent to which any easements on the property may affect legal title.

Prepaid Interest
The interest on your loan calculated on a per day basis and paid in advance from the day of your loan closing through the last day of the month in which your closing takes place. This enables the lender to make payments for your loan due on the 1st of the month.

Insurance: Homeowners & Hazard
A form or protection against physical damage to the house by fire, wind, vandalism and other causes. Your lender will expect you to have a policy in effect at closing.

For a glossary of Real Estate Terms click here.

Please, feel free to call one of our loan professionals, or initiate a quick pre-approval form, it takes only about 3 minutes to complete.