Real estate closing costs are fees paid at the time of closing in addition to a down-payment. The closing fees can vary depending if you are paying cash or using a mortgage to purchase a real property. The buyer’s closing fees can be anywhere from 3.0% to 6.0% of the purchase price.
The Closing Disclosure is a document which is used to list the services and fees incurred with purchasing or refinancing a home.
When applying for a loan, the mortgage lender will provide you a loan estimate form. The document includes an estimate for the following: the loan fees, fees paid in an advanced, title charges, taxes & insurance escrow, government charges, and additional fees. Remember, the loan estimate form displays an estimate of closing fees and the Closing Disclosure is the actual closing fees. Real Estate Settlement Procedures Act (RESPA) requires that the Closing Disclosure is given to all parties of the real estate transaction no later than three business dates prior to the schedule closing.
Please find below a few definitions of closing services and fees are displayed on a Closing Disclosure:
Lender Origination Charge – A fee charged by the mortgage lender for providing services and also processing a loan.
Mortgage Insurance Premium – An insurance policy compensates the lender for losses if a borrower default.
Escrow Taxes & Insurance – A mortgage loan may require an escrow for a certain amount which would be used for future taxes and insurance. The escrow amount is determined by the mortgage lender.
Title Services and Lender’s Title Insurance – The fees for all services associated with the specifications of the title insurance and the services of title.
Owner’s Title Insurance – An insurance policy in which protects the owner against title disputes that occurred before the date of the policy.
Government Recording and Transfer Charges- The fees that are charged by state and local government agencies for legally recording your deed, mortgage and other related documents.
Recording Deed & Mortgage
City/County Tax Stamps
State Tax/Stamps
Conservation Fee (to county the property is located)
Recorded Well Certificate (if applicable)
There is an option, you can ask the seller to pay all or a portion of your closing costs.
Seller Contributions Towards Buyer’s Closing Costs – A seller pays a percentage or a dollar amount toward the buyer’s closing costs at closing.
If you are looking to buy a new home or condo in the Twin Cities, feel free to contact RE/MAX Results – Shannon Lindstrom, Realtor @ 612-616-9714 or visit www.ShannonLindstromRealtor.com today.
