How do Closing Costs Work?
"Closing Costs" are the fees which pay for the various services involved in the sale of a home. Buyers and sellers usually negotiate to determine who will pay different portions of these costs.
As you'll see below, many of the buyer's closing costs cover the costs of originating the loan. At Tenby J. Dahman, we have extensive experience in residential mortgage lending, so we can compile a comprehensive report on mortgage-related closing costs in your "Loan Estimate".
Loan Estimates (LEs)
Buyers will receive a "Loan Estimate" of closing costs around the time the loan application is submitted to the lender. The closing costs spelled out in the Loan Estimate are estimated based on our experience with mortgage loans, but costs usually change by small amounts between delivery of the Loan Estimate (LE) and closing. We review Loan Estimates with buyers almost every day, so we will be happy to answer your questions about closing costs.
We've provided a general list of closing costs below, but we'll provide you a specific list of closing costs, with amounts, soon after you complete your loan application. At Tenby J. Dahman, we don't believe in surprises, so if your costs change, we will be sure to let you know immediately.
Standard Closing Costs
- Appraisal Fee
- Obtaining Your Credit Report
- Up-front Interest Payment
- Escrow Account
- Various Taxes
- Costs associated with "originating" your loan
- Points — lower your mortgage interest rate (optional)
- Transfer Taxes and Recording Fees
- Private Mortgage Insurance (PMI)
- Title Insurance
- Flood or Quake Insurance
Tenby J. Dahman can answer questions about these closing costs. Call us at 3038627760.