What Are Closing Costs?
Here is a breakdown of the fees that typically go into a buyer's closing costs. These fees vary depending on the specifics of the transaction, but some common fees include:
Appraisal Fee: This fee covers the cost of having a professional appraiser evaluate the property to determine its value.
Origination Fee: This fee is charged by the lender to cover the cost of processing the loan application. (This fee is different for each lender. We suggest everyone shop lenders for the best deal.)
Credit Report Fee: This fee covers the cost of obtaining the buyer's credit report.
Loan Discount Points: These are optional fees paid upfront to the lender to lower the interest rate on the mortgage loan.
Title Insurance: This insurance protects the buyer against any defects or issues wiht the property's title.
Escrow Settlement Fee: These fees cover the costs of the escrow company's services, including holding and transferring funds, and preparing necessary documents.
Pre-Paid Property Taxes: Depending on the time of year the sale takes place, the buyer may need to pay a portion of the property taxes for the year.
Homeowners Insurance: Buyer will need to pay the insurance premium for the first year upfront.
These fees can add up to several thousand dollars and should be taken into consideration when budgeting for a home purchase. Working with a Freedom Real Estate Group agent can help you navigate and understand all the fees that go into closing costs. Including, negotiating with the seller to cover some or all the fees for you. We hope this was helpful to you. Please feel free to contact any of our agents with questions you may have.