Closing Costs
When
it comes time for you to purchase
a new home or refinance the one you are living in, you cannot forget
about the closing
costs.
Closing
costs consist of no more than 5% of the total amount
of the loan, so when you are sitting down to figure out your financial
situation to get a grasp on what you can afford and what percentage you
can put
down, don’t forget to factor in the closing costs.
The
closing costs you will pay are a one time fee
that in no way can be avoided, so be prepared to pay them.
Closing
costs consist of loan origination
fees’, escrow
fees’, home owner’s insurance,
title
insurance, property
tax, property inspection,
the appraisal
fee, etc.
As
you can see, you will be responsible for paying quite a pretty penny before
you even step foot in your new home or even refinance
your existing one.
For
the sake of those refinancing, the closing costs are usually taken out
of the equity
in the home. Of course the choice is yours and you are made well aware
of this up front.
Closing
costs are sometimes misunderstood by the consumer. It is important to
understand that not all of the fee’s are being collected by the
lender.
Generally the application
fee and the loan origination
fee go to the lender while the other costs
are distributed to the appropriate institutions.
Unfortunately
for the consumer, nobody works for free. So there is no way of getting
around these fees. So be prepared to factor the closing
cost’s into the scenario while you are determining your spending
power.
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Faith Estimate
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