Closing Costs 101

Many people overlook closing costs involved with buying a property and obtaining a mortgage. Due to the infrequent nature of this type of transaction and with many people buying a home for the first time, these costs are often unknown or unfamiliar. You may be wondering what extra costs you will need to budget for in addition to saving a down payment and getting a mortgage.

Working with a professional that provides complete transparency can help you successfully prepare for what may be the biggest transaction of your life. Our experts can provide you with a walkthrough of all expenses so that you are set up with the right expectations with no surprises.

So, what are closing costs exactly? Closing costs are fees for services that are paid by the purchaser at the time of completing a real estate transaction. It is when the property is transferred from the seller to the buyer and includes things like an Application fee, Credit Report fee, Appraisal fee, Attorney fee, Closing/Escrow fee, Home Inspection fee, Homeowners Insurance, Property Transfer Tax, Property Taxes, Origination Fee, Underwriting Fee, Survey Fee, Title Search fee, Private Mortgage Insurance, Home Owners Association Transfer fee, Title Insurance, Pest Inspection (some states require), Prepaid Interest, Flood Insurance (if property is in flood zone) and sometimes there are wire transfer fees for the transfer of funds between agencies and from the lender.

Not all transactions will be subject to all of these fees. Depending on the state and country of your real estate purchase and the type of loan you choose these costs will vary widely. Our knowledgeable mortgage agents are happy to walk you through which costs may be applicable to your scenario as well as provide an estimate of the value of these costs. In general, you should plan to have about 2-5% of the purchase price set aside for closing costs. Unlike most lenders in the industry, as a broker, Shop Your Own Mortgage does not charge any fees to you, the borrower, for our services. We do not charge any bank fees, origination fees, processing fees, or credit report fees. Another reason to choose Shop Your Own Mortgage to get the Best Mortgage. Period.

*Quick Tip- 1 year of homeowner’s insurance, the appraisal cost and the survey cost can be paid on a credit card prior to closing.