Closing Costs (Part 2)

What Costs Will I Pay at Closing?

Good question! There are many fees and charges that are attached to the closing of a mortgage. Most of them are listed below. (See the glossary for the meaning of each one.) Different lenders call fees by different names which could get confusing if you don't know what each of the terms mean.

If you don't understand what a fee is for, ask us questions. We are hoping this website will help you.

When you talk to us about the mortgage and we take your information on an application, we also have to give you a document called a GOOD FAITH ESTIMATE (GFE). This document should have all the fees that are applied to your loan. Some disreputable lenders only give you what they consider to be the “closing costs” by omitting some fees, for examples: the reserves , or the 1 year hazard insurance that has to be paid by closing. So their GFE looks less than our GFE and at closing you will be in for a shock! Because you will owe more than you were told by your broker/lender.

We will always give you what we call “worse case scenario GFE”, meaning that all normal fees that you could encounter as you go through the loan process are included on the Good Faith Estimate. And the SHOCK you usually get from us is that you have to pay LESS at closing, because we overestimated! We would rather give you a good surprise at closing!!!
Keep in mind that these figures are still an ESTIMATE. We are as close as we can get, but if there are fees that we are not aware of at the beginning of the mortgage process, that occur during the loan process, then the GFE is adjusted accordingly and sent to you to show you where your money is going and why. An example would be, if you decided to by a house and then changed to a condo, the condo fees and association dues would not be on the initial GFE, but would be added onto your future GFEs.

So to recap, Closing Costs are the numerous expenses which buyers and sellers normally incur to complete a transaction in the transfer of ownership of real estate. These costs are in addition to price of the property and are items prepaid at the closing day. This is a typical list:

BUYER'S EXPENSES

• Documentary Stamps on Notes
• Recording Deed and Mortgage
• Escrow Fees
• Attorney's Fee
• Title Insurance
• Appraisal and Inspections
• Survey Charge
• Lender Fees
• 1 Year prepaid Hazard (Homeowners) Insurance

SELLER'S EXPENSES

• Cost of Abstract
• Documentary Stamps on Deed
• Real Estate Commission
• Recording Mortgage
• Survey Charge
• Escrow Fees
• Attorney's Fee

Closing costs vary according to lender, location and even from sale to sale. Some costs can be negotiated, reduced or even waived, and some may be paid by the seller.

When you're doing your research, use this checklist to get a rough idea of what you'll pay at closing. The lender or closing agent will provide you with an exact total a day or two before closing. Feel free to download this checklist for your own use.

Closing Checklist > Download Word file Download PDF file