Thursday, September 17, 2015

Closing Costs: The 411

You've decided to purchase a new home and now it's time to think about how much money you'll need upfront to make it happen. When you get a mortgage at the Lake of the Ozarks, you will need to pay fees charged by lenders and third parties related to the purchase of the home. These fees are in addition to the down payment. Here's the 411 on these "closing costs":

What are Closing Costs? 

Fees paid at the closing of a real estate transaction are called closing costs. The closing is when the title to the property is conveyed to the buyer. These costs can be incurred by either the buyer or the seller, but are typically paid by the buyer. They typically range from 2-5%  of the purchase price.

What Fees Make Up the Closing Costs? 

Depending on where you live and the type of property you buy, the closing costs can vary widely. However, closing costs will often include the following:
  • Credit Check Fee
  • Loan Origination Fee (charged by lenders for processing the paperwork) 
  • Attorney's Fees
  • Inspection Fees
  • Discount Points (fees you pay to lower your interest rate) 
  • Appraisal Fee
  • Survey Fee (covers the cost of verifying property lines)
  • Title Insurance (protects the lender in case the title isn't clean)
  • Title Search Fees (pays for background check on the title the make sure there are no unpaid mortgages or tax liens on the property)
  • Escrow Deposit
  • Pest Inspection Fee
  • Recording Fee (paid to a city or county to record the new land records) 
  • Underwriting Fee (covers the cost of evaluating a mortgage loan application) 

The "Good Faith Estimate"

Within 3 days of applying for a loan, your lender is required by law to provide you with a "good faith estimate" (GFE) of what the closing costs on your home will be. However, these are just an estimate and many of the fees listed on the GFE can legally change by up to 10%. Within a day of your closing, the lender should give you a HUD-1 settlement statement, which will outline the final closing costs. You can then compare this to your GFE and ask for an explanation on any changes.

When it comes to your financing needs, I'm committed to working with you every step of the way. If you're planning on buying a home at the Lake of the Ozarks in the near future, give our office a call at 573-746-7211. As your Lake of the Ozarks mortgage lender, I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve!

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211


**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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