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How Do I Know What May Closing Costs Will Be
(presented by www.refinance-refinance.net - mortgage lenders)



By Ben Afzal

Basics

When you apply for a loan you will get a “Good Faith Estimate”.

This estimate is a detailed estimate be individual line item.

These closing costs may include:

  • Loan fees
  • Fees to be paid in advance
  • Title charges
  • Government charges
  • Additional charges

Your loan fees are the estimate of the cost of getting the loan from a lender or mortgage broker.

Fees paid in advance can be a prepayment of interest or property taxes. Although this is a closing cost, it is really a cost you will incur anyways that you are just prepaying.

Title charges are usually the cost of getting a title insurance policy. This is a policy that protects the lender from any future dispute in the property’s ownership. For example, you may buy a house from a person and find out afterward that the ownership of the property is in dispute (rare, but this can happen). The title insurance policy is protection for this scenario.

Government charges are usually filing fees to update property records.

Additional charges may include minor charges such as notary fees, courier fees, or other fees.

Only Estimates

The good faith estimate is only an estimate. Be careful that one of your estimates is not lowballed just to get the business. There are many costs that are unavoidable. If your good faith estimate is missing numbers in a large part of the statement then it may not have been filled out properly.

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When you close some of the items on the closing statements are only estimates, such as the final cost of an insurance policy.

Sometimes you will even get a refund of some of your closing costs after the close of a loan. This is because some of the closing costs were overestimated and you are due the difference.

There may be good reasons for a last minute change in closing costs. For example, your credit score may have suddenly dropped and a lender may switch you to a different loan program that has different fees.

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This entry was posted on Wednesday, October 11th, 2006 at 2:07 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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