How 'Bout Them Closing Costs
When you apply for a residential mortgage, federal law requires your lender (or mortgage broker) to furnish a "Good Faith Estimate of Closing Costs" within three days of the application. This is not an exact number, but it should be close (within 10%) of your final costs on the "Settlement Statement" at closing. Unfortunately, we have some mortgage people who will surprise you at the closing table with a few thousand extra dollars in costs. Not only does this break several Commandments, it's illegal. They're counting on your need to close right then and accepting the extra charges. There's another Federal law that comes into play ... you must be furnished withe the final "Settlement Statement" twenty-four hours prior to closing. Insist on this.
When applying for a home loan, tell your mortgage person you want a zero/zero loan. This mean no discount points and no origination fee. This makes it easy for you to compare rates from one lender to the other. The broker will make their money on the "yield spread premium" which is paid by the lender. The lender will also require an underwriting fee, tax service fee, and flood certification; expect to pay close to $800 for these charges. The appraisal will cost around $350, and you should get a termite inspection for about $75. I'll make all my attorney friends mad and suggest you use a title company to close the loan. They'll work cheaper. Just make sure you get an "Owner's Title Policy;" this is an insurance policy to protect you against any title defects. It's rare, but it does happen, and the policy only costs $25. The recording fee is a charge by your County Clerk to record the mortgage and deed, and is based on the number of pages in the document. Some states and counties will also have documentary fees ... they are what they are, so don't worry about them. If I'm buying a piece of property, I want the seller to supply a survey showing the boundary lines.
Who pays each of these fees are negotiable between the buyer and seller.
Good Luck! If you have a mortgage question call me at 888-554-6755 or e-mail jack@abcmortgageal.com.
When applying for a home loan, tell your mortgage person you want a zero/zero loan. This mean no discount points and no origination fee. This makes it easy for you to compare rates from one lender to the other. The broker will make their money on the "yield spread premium" which is paid by the lender. The lender will also require an underwriting fee, tax service fee, and flood certification; expect to pay close to $800 for these charges. The appraisal will cost around $350, and you should get a termite inspection for about $75. I'll make all my attorney friends mad and suggest you use a title company to close the loan. They'll work cheaper. Just make sure you get an "Owner's Title Policy;" this is an insurance policy to protect you against any title defects. It's rare, but it does happen, and the policy only costs $25. The recording fee is a charge by your County Clerk to record the mortgage and deed, and is based on the number of pages in the document. Some states and counties will also have documentary fees ... they are what they are, so don't worry about them. If I'm buying a piece of property, I want the seller to supply a survey showing the boundary lines.
Who pays each of these fees are negotiable between the buyer and seller.
Good Luck! If you have a mortgage question call me at 888-554-6755 or e-mail jack@abcmortgageal.com.
Labels: mortgage closing costs
posted by Jack Yeiser at
1:02 PM
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