Preparing for the Closing Costs

by Marianne Salina
Loan Page Columnist

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So, you've been approved for a new home loan, and soon you will have a mortgage for the house of your dreams. What else is there to consider? Closing costs. Depending on the loan agreements, you will be responsible for numerous fees that are included in the process of closing a mortgage. All of these costs should be delineated and made clear to you by your mortgage brokers. The lender should list all the costs in the Good Faith Estimate, which you can acquire before you even hire a mortgage broker. You should consider at least three Good Faith Estimates before agreeing to a new home loan.

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What are the Fees?

Some of the fees that will be included in your mortgage agreement are:

» Discount PointsAdditional money you can pay to the mortgage brokers at closing. Paying more up front lowers interest rates.
» Application FeeCovers the lender's cost to produce all of the information on your new home loan.
» Appraisal FeeRanging from $150 to $400 depending on the price of your home, this pays for a value-assessment. The mortgage brokers require this estimate for your loan.
» Credit Report.
» Title Search and InsuranceHistorical records on the property of your new home, including deeds, court records, and property indexes. A title search will show any delinquent payments or unsatisfied mortgages.

While these closing fees add up in the end, they are necessary for securing essential information to process a loan. This gets you off to a solid start in your new home.

Sources:

Closing Costs, Mortgage-X, http://mortgage-x.com/library/closing_costs.htm

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