Home Loans
Mortgage Closing Costs - What Are They
(presented by www.refinance-refinance.net - mortgage lenders)
By Ben Afzal
Basics
Your mortgage closing costs are all the costs associated with buying a property, outside the amount you actually pay for the property.
The closing costs can include:
realtor commissions
mortgage broker commissions
lender fees
courier fees
money wire fees
escrow fees
title fees
hazard insurance policy
title insurance policy
public filing fees
notary fees
Many of these fees are about the same regardless of which lender/brokers you use. These type of fees can include notary fees, courier fees, money wire fees, and other smaller fees.
Larger fees such as broker commissions are something that you can negotiate in advance so you should have a good idea how much they are. These can vary quite a bit depending on your negotiating skills and how much you shop around. The difference can be several thousand dollars overall between different loan sources.
The largest fees are typically the realtor and loan commissions. These are usually in the form of a percentage of the property, so they increase in size as the transaction size increases.
Conclusion
You need to make sure you understand where the costs are coming from. It allows you to make sure you are getting a fair deal. It will also help you estimate how much money you will need to purchase your property.
For example, if you buy a $500,000 property with 100% lender financing your loan size will be $500,000. If your closing costs are 3% of the loan size the closing costs will be $15,000 ($500,000 x 0.03). This $15,000 is something you may need to pay out of pocket. At closing time for the deal you will need to bring $15,000 even though you are getting 100% financing.
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