What Are Closing Costs?
Closing costs are fees associated with your home purchase that are paid at the closing of a real estate transaction.
Why Are There Fees?
Throughout your home purchase, the lender, and other third parties, perform a variety of different services, some of which can be time-consuming and complicated. Closing costs are fees these professionals charge for these services to complete your home loan.
What Are Some Typical Fees Included In Closing Costs?
Fees can vary depending on the situation, however, here are some common fees that are often included: (* Note – lenders are required by law to disclose the costs of financing to borrowers. Your lender will give you an estimate for your loan, which will include what your closing costs will be, within three business days of receiving your completed loan application.)
- Home Appraisal
- Origination
- Credit Report
- Underwriting
- Homeowners Insurance
- Title Company
- Government Recording
How Much Are Closing Costs?
Closing costs are generally 2 percent to 5 percent of the loan principal but can vary from state to state.