Common Closing Costs for Buyers James Piedad REALTOR

Common Closing Costs for Buyers

The lender must disclose a good faith estimate of all settlement costs. A check to
cover your closing costs will probably have to be a cashier’s check. The title company
or other entity conducting the closing will tell you the required amount for:

        Downpayment
        Loan origination fees
        Points, or loan discount fees, you pay to receive a lower interest rate
        Appraisal fee
        Credit report
        Private mortgage insurance premium
        Insurance escrow for homeowners insurance, if being paid as part of the
mortgage
        Property tax escrow, if being paid as part of the mortgage. Lenders keep funds
for taxes and insurance in escrow accounts as they are paid with the mortgage, then
pay the insurance or taxes for you.
        Deed recording fees
        Title insurance policy premiums
        Survey
        Inspection fees—building inspection, termites, etc.
        Notary fees
        Prorations for your share of costs, such as utility bills and property taxes

A Note About Prorations: Because such costs are usually paid on either a monthly or
yearly basis, you might have to pay a bill for services used by the sellers before they
moved. Proration is a way for the sellers to pay you back or for you to pay them for
bills they may have paid in advance. For example, the gas company usually sends a
bill each month for the gas used during the previous month. But assume you buy the
home on the 6th of the month. You would owe the gas company for only the days from
the 6th to the end for the month. The seller would owe for the first five days. The bill
would be prorated for the number of days in the month, and then each person would
be responsible for the days of his or her ownership.