Closing Costs 101

Many people overlook the closing costs of buying a property and obtaining a mortgage. Due to the infrequent nature of this type of transaction, these costs are often unknown or unfamiliar. You may wonder what extra costs you need to budget for besides your down payment and mortgage payment.

Working with a transparent professional can help you prepare for what may be the biggest transaction of your life. Our experts provide you with a walk-through of all expenses so that you’re set up with the right expectations and no surprises.

So, what are closing costs exactly?

Closing costs are service fees paid by homebuyers when they complete real estate transactions. When the property is transferred from the seller to the buyer, certain fees apply, including:

Taxes and Fees

  • 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
  • Homeowners Association Transfer fee
  • Title Insurance
  • Pest Inspection (required by some states)
  • Prepaid interest
  • Wire Transfer Fees
  • Flood insurance (if property is in a flood zone)

Not all transactions are subject to all these fees. Depending on the location of your real estate purchase and the type of loan you choose, costs will vary widely. Our knowledgeable mortgage agents are happy to walk you through which applicable costs and also provide a value estimate. In general, you should plan to have about two to five percent of the purchase price set aside for closing costs. Unlike most lenders in the industry, Shop Your Own Mortgage doesn’t charge any borrower fees for our services. We don’t 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—The appraisal cost, survey cost and one year of homeowners insurance is payable on a credit card before closing.