Closing Costs
Lender fees & closing costs

All closing costs are spelled out in the lender’s Good Faith Estimate, which is required by Federal law. If you want to make sure you are paying the least amount possible in closing cost fees, it is wise to compare costs from different lenders. The Good Faith Estimate is just that – an estimate. The actual changes may differ. RESPA allows the borrower to request to see the HUD-1 Settlement Statement that shows all actual charges imposed on borrower in connection with the settlement one day before the closing. If you see a charge that doesn’t make sense, or that no other lender has, it’s time to ask questions.

Below is a list of fees you may expect lenders to charge you (although different lenders may use different names):

Also known as Origination Points fees or point is charged by the lender for evaluating, preparing, and submitting a proposed mortgage loan. Origination fees are often expressed as a percentage. A one percent loan origination fee is equal to 1% of the loan amount. Some lenders add origination points into their quoted points while other lenders add an origination point in addition to their quoted points.

Covers the lender’s cost to process the information on your loan. Usually, you must pay this charge at the time you file the application. Some lenders may apply the cost of the application fee to certain closing costs. Generally lenders do not refund this application fee if you are not approved for the loan or if you decide not to take it.

Three major national credit bureaus (Equifax, TransUnion and Experian) supply lenders with the information on your credit behavior. Consumers typically pay $45 to $55 for this report. You only pay once, however, usually between $40 and $60.

Here the lender is charging you for the cost of processing the loan. It is usually between $75 and $125.

A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents. The purpose of the search is to make sure the buyer is purchasing a house from the legal owner and there are no liens, overdue special assessments, or other claims or outstanding restrictive covenants filed in the record, which would adversely affect the marketability or value of title.

A title search can show a number of title defects among these are unpaid taxes, unsatisfied mortgages and judgments against the seller. But there are some hidden defects that even the most diligent title search may never reveal. For instance, the previous owner could have incorrectly stated his marital status, resulting in a possible claim by his legal spouse. Other problems include things like fraud, forgery, defective deeds, mental incompetence, confusion due to similar or identical names, and clerical errors in the records. These defects can arise after you have purchased your home and jeopardize your right to ownership.

The title insurance company or lender may require a survey of the property. This is to verify official boundaries of the property and that your lot has not been encroached upon by any structures. Depending on the size of the property and what state you live in, this cost ranges from $225 to $350.

Some homes require flood certification fees, amounting up to $30. It verifies that the property is not in a flood zone. If the property is located within a defined zone the lender will require a flood insurance policy.

A small fee (to $50 to $150) to cover the cost of the paperwork required to record your home purchase.

Are collected by the state of Maine and are paid equally by the buyer and the seller. The amount is calculated as $2.20 per $1,000 of the sales price.

Accrued interest from closing date until the end of the month.

The per-day interest charge on the loan from the day of the closing until the last day of the month in which you close. This is paid at closing due to timing and last minute calculations. After that, you skip a month and begin paying a regular monthly balance because the loan is paid in arrears. The cost depends on the size of the loan and the interest rate.

The largest expense for sellers is usually the real estate agent’s commission. This fee is typically a percentage of the sale price and is split between the seller’s agent and the buyer’s agent.

The largest expense for sellers is usually the real estate agent’s commission. This fee is typically a percentage of the sale price and is split between the seller’s agent and the buyer’s agent.

Sellers often have to reimburse the buyer for a portion of property taxes that have been pre-paid for the year. This is calculated based on the number of days the seller owned the property during that tax year.

If the property is part of a homeowners association, the seller may need to pay any outstanding dues or assessments.

Customarily paid for by the seller.

While not always the case, sellers may agree to contribute to some of the buyer’s closing costs as part of the negotiation process.

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