Closing fees are associated at the end of a real estate transaction when the title deed is transferred to the buyer. Both buyers and sellers can incur closing costs. Closing costs tend to vary depending on where you live and often include loan origination fee, title insurance, escrow deposit, pest inspection, survey fee, appraisal fee, underwriting fee, recording fees, charges for inspection requested by your lender, and title search fees just to name a few.
Closing fees often amount to between 2% and 5% of the total home purchase price. That means that if you’re buying a home for $150,000, you will be required to pay between $3,000 and $7500 in closing costs. Typically, buyers pay an average of $3,700 in closing fees. Mortgage lenders have a legal obligation to provide borrowers with estimates of loans that should be include closing costs.
Three business days before the official closing date, you should be given a Closure Disclosure Statement by your mortgage lender. The document outlines all the closing costs that you are required to pay for. You may want to compare the document with the Loan Estimate and, if necessary, ask your lawyer or real estate agent to clarify anything you don't understand. Be sure to ask what each cost is and why it's needed. It's important to understand that, while some of the closing costs are negotiable, some of them are not really necessary. If the costs become too high, you can always switch your mortgage lender.
For all of your mortgage questions, contact the pros at Midland Mortgage!