Closing costs can include many items: fees the lender charges you to
process and finalize your loan; appraisal fees; inspection fees; credit
search fees; title search fees; attorneys fees; transfer taxes; prepaid
property taxes; prepaid interest; homeowners insurance. The exact fees
will vary by lender and according to the kind of property you are
purchasing.
Lenders are required to detail all closing costs on an initial loan
estimate when you apply for the loan, and then again a few days before
the closing.
Can I Negotiate Closing Costs?
Some lenders offer to help with or reduce closing costs, so always ask
about that. You may also ask for the seller’s assistance with closing
costs as part of your home purchase negotiation. You can shop for
certain closing services on your own to try to find the best deal. The
services you can shop for must be outlined on your loan estimate, and
typically include inspection and survey fees, as well as title
insurance.
What Are Points Paid at Closing?
Paying points – short for discount points – at closing is a way of
getting a lower interest rate. By paying more upfront, you get a lower
rate and, therefore, a lower monthly payment. Points are calculated as 1
percent of the loan amount. So, for example, if you pay one point at
closing on a $200,000 loan, you are paying $2,000. The amount your rate
is reduced depends on the lender and market conditions, so it’s always
good to compare.
For more information on buying a home, check out the Consumer Financial
Protection Bureau’s detailed online guide,
Owning a Home.
What Fees Must I Pay at Closing?
