Understanding Closing Costs

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By: Andrew Mroki

When you are purchasing a home or refinancing, there are certain costs that are paid by the member at closing. Closing cost are not the same for each member. The main two items that make up the closing costs are the lender fee and title company fees. The title company fees could vary based on the size of the loan amount. The larger the loan amount, the higher the closing fee of lenders title insurance will be. The closing costs are the actual fees that it cost to have the services completed that it takes to facilitate the process. Homebuyers should keep in mind that in addition to the closing costs, you will also have the down payment that needs to be paid and the escrow which is the taxes and insurance on the property. There are ways to help cover the closing cost if you needed the assistance. You can utilize lender credits which come from taking a higher interest rate than what has been offered. Additionally, there are also seller concessions which have the seller help pay for some or all of the closing costs.

How to Be Prepared:

Being prepare is key, which is why the first thing you should do is speak with a loan officer to get an estimate of what you could be expecting in closing cost. This way you can make sure you have enough funds saved up to be able to cover the closing cost along with the down payment and escrow. If you are not prepared and do not have enough funds this could potentially prevent you from being able to close when purchasing a home. When doing a refinance, you can roll in all the cost into the loan if you have the equity to do so.

Closing cost are the fees it cost when doing a purchase or refinance mortgage. The fees are for the services being performed to work and complete the loan. The closing cost mainly are made up of the lender fees and the title company fees. When doing a refinance, you can roll the closing cost into your loan. When doing a purchase, you must pay the closing cost up front. It is very important to be prepared and know how much your closing cost may cost so that you can have the funds available when you are ready to do the mortgage.

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