Confused
about closing terms? HomeImprovementWiz can help! Below you'll find
some frequently used terms:
What can I expect to pay for closing
costs?
Nationwide buyers can expect to pay anywhere from
1 to 5 percent of the loan on closing costs. In other words, $1,000
to $5,000 in closing costs on a home $100,000 home and include mortgage
fees and other expenses. Because costs may vary area to area and from
lender to lender, it Ěs important to pay attention to details of the
process.
Here is a list of standard closing documents you can expect at closing:
Appraisal fees.
This fee is charged relative to the purchase price or size of the home.
For a $100,000 home, $275 is about the minimum charged.
Loan application
fees and credit report. Consumers
typically pay $75 to $150 for this report although there heave been
reports of credit fees as high as $350. ( If your are self employed,
you will need a second business report that costs between $55 and $100.)
Documentation preparations.
Some lenders could charge a variation of prices for this, some charge
underwriting fees, processing fees and documentation preparation fees,
which regularly work out to be less than 1% of the loan amount.
Title insurance fee. A
mortgage policy, purchased by the buyer is required. Settlement or closing
fees, title examination fee, endorsements and the actual mortgage policy
fee are included in the title insurance fee.
Recording the mortgage.
This varies from state to state and county to
county, but there is a fixed cost per page usually about $50
Documentary stamp tax on the mortgage. This varies
from state to state also, and totals about 35 cents per $100 borrowed
Survey fee. Depending on
the size of the property and what state you live in, this cost ranges
from $225 to $400.
Pest inspection. A good idea,
which cost $75 on average and should be part of an overall inspection
Homeowner's insurance. Most
states collect 14 months in advance.
Mortgage insurance. Otherwise known as PMI, how
much you put down determines this amount. Twenty percent down eliminates
mortgage insurance. The standard is that three months of this is collected.
Taxes. Most require four
months collected in escrow.
Interim interest or daily rate of interest.
You pay this through the day of closing through the end of the
month.
Points. Charges levied
by the mortgage lender and usually payable at closing represent s 1%
of the face value of the mortgage.
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