costs are literally that: the charges for closing your transaction.
They are detailed in a document called a “Good Faith Estimate” which
should be given to you by your lender after you have applied for your
loan. This document includes fees charged by the Lender as well as the
other parties involved in the transaction.
Listed below are some of the charges incurred for
your transaction, and explanations for each. Each will be itemized on
your Settlement Statement at the close of escrow and divided into
Loan Origination Fee - Covers the Lender's costs to administrate the loan.
Prepaid Interest - This varies depending on your closing date. It is a payment to the Lender in advance for your loan.
Private Mortgage Insurance Premium - Assessed according to the amount of your down payment.
Taxes - Your real estate taxes to the county in which you live. Depends on method of assessment in your county. Usually prorated.
Insurance - Your property insurance. May be required to pay for the year in advance.
Credit Report - pays for the report required by your Lender.
Appraisal fee - Paid to the appraiser who determines the value of your property.
Homeowner's Association Fee - May be required by an Association to transfer Association membership to
the new homeowner, and to cover costs of documentation. May also
require payment for assessment.
Title/Escrow Fees - The amount charged by the Title/Escrow company to process your transaction.
Miscellaneous Fees - There are always some! Usually in association with recording deeds, notary public fees, document preparation and signing.
are charged in conjunction with increasing the yield for investors and
making loan packages more attractive. They can lower your interest rate
and are paid up front.
Points are typically 1% of the loan amount and are usually paid by the Buyer.
number of points charged does fluctuate with the market, but they are
not set by any government agency. They are assessed by each individual
You should consult with your tax advisor regarding points, as they may be deductible.