Closing Costs?

Closing Costs

What are closing costs in a real estate mortgage transaction?

 The term “Closing Costs” consist of two items, “closing costs” and “pre-paid items”.

These two terms make up “Closing Costs”, which is why asking the question, “what are my
closing costs”, is difficult to answer or you get a wide variety of answers.

Let me break it down a little better. What does the item “closing costs” consist of?

They include but are not limited to the following:

  1. Origination fee
  2. Discount points
  3. Underwriter fee
  4. Processing fee
  5. Administrative fee
  6. Appraisal
  7. Credit report
  8. Tax service fee
  9. Title services
  10. Title insurance (Lenders &
  11. Survey
  12. Pest inspection
  13. Government recording fees
  14. Transfer Taxes

The above listed items are costs associated with your real estate transaction.

“Pre-paid Items” are your costs that are required to be paid in advance or at the closing
of your real estate transaction.

  1. One year of home owners (hazard)
  2. Escrow, 2 or 3 months of taxes and
    insurance to establish your escrow account if required.
  3. Daily Interest Charges

So, why do you get so many different answers?  It’s all in the perspective. A preliminary HUD-1 may only give you Title Service fees, other HUD-1’s may also provide Title
Service Fees along with government recording fees and transfer taxes.  When you ask “what are my closing costs” and you receive an answer, the next question you ask is “what does my closing costs consist of?”

Your loan officer is the only person who can give you an all-around picture of all the
estimated closing costs and pre-paid items. You, the homebuyer, decide who and
how much to pay for homeowner’s insurance and other shoppable services.

The exact overall closing costs won’t be known until you have a “clear-to-close” and a
specific date to close. This is when the Lender and Title Company prepare your
closing statement (HUD-1) in advance of your closing on your real estate transaction.

For more detailed information, you may consider U.S. Department of Housing and Urban Development’s Settlement Costs Booklet. You can get this at any mortgage lending institutions or from your Mortgage Loan Officer or call me, Jim Marcinkowski
at 239-936-4232.


About Best Florida Mortgage Company! Jim Marcinkowski

Mission Statement Our mission is to be the home financing partner that you trust to serve your family, friends and community. Through our family of dedicated mortgage professionals, our commitment is to deliver an exceptional experience. Our unwavering dedication to integrity, honesty and ethics is the foundation of all of our relationships. NMLS 182565, NMLS 1016
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