Understanding Mortgage Closing Costs

House of Brokers Realty, Inc.

Shopping for the best mortgage involves more than just checking interest rates and loan terms. Many borrowers are surprised by the many additional costs involved in closing the loan.

Understanding Mortgage Closing Costs

Almost all closing costs relate to fees that the mortgage lender is charged by a third-party company and then passes on to the borrower. Some of the fees are additional costs the lender levies. Because these fees are all settled at the closing table, they are commonly referred to as closing costs.

Breaking down closing costs

Closing costs usually account for 2 to 5 percent of a home’s sale price, although they may be more or less in some cases. These costs typically cover:

  • Obtaining a credit report
  • Processing paperwork for the loan (loan origination fees)
  • Legal fees
  • Home inspections
  • Appraisals
  • Surveys
  • Title insurance
  • Title searches
  • An escrow deposit
  • Recording the transaction in the city or county’s records
  • Underwriting the mortgage…

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