Understanding Closing Costs
Fees paid at the closing of a real estate transaction are called 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 will want to make sure to consider closing costs. When shopping for homes, you will 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 by 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 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 - The seller will typically provide a credit to the buyer at closing for the real estate taxes for the portion of the year that they owned the property up to the closing date, then the buyer will be responsible for the full tax bill when due. If you are escrowing, your lender will require a certain number of months in the escrow account at closing based on when you close and when the taxes are due.
- 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.
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Senior Loan Officer
NMLS #: 493712
4655 B Osage Beach Parkway
Osage Beach, MO 65065
Direct: (573) 746-7211
Cell: (573) 216-7258
e-Fax: (866) 397-0318
Email: mlasson@fsbfinancial.com
Website: www.YourLakeLoan.com
