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Closing Costs

Closing Costs

Expenses incurred by the buyer and seller in a real estate or mortgage transaction.

There are two types of costs: recurring and non recurring.

Non-recurring costs are one time transactional costs which include
Discount and origination points
Lender fees - underwriting, processing, document preparations, flood certificate, tax service, wire transfer, courier, etc
Title insurance fees
Escrow, attorney or closing agent fees
Recording fees
Inspection and appraisal fees
Real estate brokerage commissions

Recurring fees are costs associated with owning the property and they recur month after month. These costs may include hazard insurance, interest, property taxes, mortgage insurance (PMI), and association fees. A pro-rated amount of these fees may have to be paid at closing including:
Pre-paid interest - interest charges from the date of closing to the end of the month;
Property taxes if due;
Hazard insurance, fire insurance or homeowners insurance has to be paid for one year
Mortgage insurance (PMI) - may be required if the loan amount is more than 80% of the value of the property. In the past a whole year of PMI had to be paid up front, however in recent years many PMI companies only require 1-2 months up front. Mortgage insurance premiums are normally paid every month with the loan payment;
Impound account may need money to be set up for future payments.

Closing Costs Part2
Back End Points

Good Faith Estimate
Origination Fees
Points On Your Loan
ARM Loans
Payments Toward Principal

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