Friday, August 4, 2017

Understanding Closing Costs

The final step in purchasing a home at the Lake of the Ozarks is the closing. During this process, you will meet with everyone involved in the transaction, sign all the papers and receive the keys to your new home. Along with this process, comes some fees, known as closing costs. Keep reading to learn more about closing costs from your Lake of the Ozarks mortgage lender.

Understanding Closing Costs

Many home buyers don't realize how much money they will need to contribute upfront when purchasing a home. As you work with a mortgage professional at the Lake of the Ozarks to determine a budget for your home purchase, you'll want to make sure to consider closing costs. When shopping for homes, you'll want to mentally add in several thousand dollars to cover those costs and help you determine if that property is affordable for you. Generally, your closing costs will be anywhere from 3-5% of the loan amount.

What are Closing Costs? 

There are a lot of applicable fees that go into the "closing costs." Below is a breakdown of what the closing costs typically include:
  • Loan Origination Fees - charged by the lender to pay for the evaluation & preparation of your home loan at the Lake of the Ozarks
  • Discount Points - prepaid finance charges to "pay down" the interest rate, if you plan to stay in your home at least 5 years, these points will benefit you buy saving money on interest in the long-run. 
  • Credit Report Check - covers the fee for pulling your credit. 
  • Inspection Fees - covers the cost to have the home inspected.
  • Appraisal Fees - covers the home appraisal, which determines the market value of the home. 
  • Homeowner's Insurance - home insurance is usually mandatory and has to be in place prior to the closing. 
  • Private Mortgage Insurance - depending on how much of down payment you provide, you may be required to purchase PMI. The premiums are usually setup to be paid annually through an escrow account or can be paid in full at closing. 
  • Attorney Fees - sometimes a buyer will want an attorney to represent them, and those fees are typically based on the cost of the home and how complicated the sale becomes. 
  • Taxes - in most states, the buyer will be required to provide 4-8 months of taxes at the time of closing, and that money will go into an escrow account. 
  • Daily Rate of Interest - this fee covers the loan interest from the closing date through the end of the first month and is paid to your lender. 
  • Document Preparation & Title Fees - these are paid to the title company, and include the title search and title insurance. A recording fee is also charged by the title company to cover the cost of recording the transfer of the title at the county clerk's office. 
  • Survey Costs - covers the cost of a survey on the property, which makes certain that there are no new structures added to the property since the last survey and that the property meets legal codes. 
As you can see, there are a lot of processes that go into the purchase of a home and costs involved. This is not a comprehensive list, and you will need to talk with your lender to determine an estimate of what your specific closing costs will be. 

For more information about what's involved with financing a home at the Lake of the Ozarks, give Lakelender Michael Lasson a call at 573-746-7211. I'm committed to working with you every step of the way. I'll discuss your 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
Senior Loan Officer
NMLS #: 493712

4655 B Osage Beach Parkway
Osage Beach, MO 65065

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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