How do Closing Costs Work?
Certain standard costs are related to closing the sale of a home. Sellers and buyers usually share these costs, as the sales contract specifies.
As indicated below, many of the buyer's costs are related to the costs of originating the mortgage loan. At Equity Edge Mortgage, Inc., we have extensive experience in residential mortgage lending, so we can compile a comprehensive report on closing costs related to your mortgage in your "Good Faith Estimate".
Good Faith Estimates (GFEs)
Buyers get a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. The closing costs enumerated in the Good Faith Estimate are estimated based on our experience with mortgage loans, but costs usually change a little bit between the Good Faith Estimate (GFE) and closing. We review Good Faith Estimates with buyers every day, so we will be happy to answer the you have about closing costs.
Below is a fairly generic list of costs for buying residential real estate. We will provide a specific list of your closing costs when we provide your Good Faith Estimate.
Standard Closing Costs
- Interest Payment
- Escrow Account
- Loan Origination Fee
- Points — These are costs you pay up-front to lower your mortgage interest rate (optional)
- Appraisal Fee
- Credit Report
- Recording Fees & Transfer Taxes
- Flood / Earthquake Insurance
- Private Mortgage Insurance (PMI)
- Title Insurance
At Equity Edge Mortgage, Inc., we answer questions about closing costs every day. Call us at 719-425-2226.