Settlement 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
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