When you’re buying a house, there are a lot of different costs that you need to be aware of. Some of these costs are associated with the actual purchase of the house, and some of them are associated with the closing process. Here’s a rundown of the different types of closing costs that you may encounter:
Origination fees: These are the fees charged by the lender for processing your loan application. They can vary widely from lender to lender, so it’s important to shop around.
Discount points: These are fees that you can choose to pay in order to get a lower interest rate on your loan. Each point typically costs 1% of the total loan amount.
Appraisal fee: The lender will order an appraisal of the property in order to make sure that it is worth the amount that you are borrowing.
Credit report fee: The lender will pull your credit report in order to assess your creditworthiness.
Title insurance: This insurance protects you from any errors in the title of the property.
Escrow fees: These are the fees charged by the escrow company for their services.
Recording fees: These are the fees charged by the county for recording the deed to the property.
Mortgage insurance: If you are putting less than 20% down on the property, you will likely be required to pay mortgage insurance. This insurance protects the lender in case you default on your loan.
Homeowner’s insurance: You will be required to purchase homeowner’s insurance in order to protect your home from damage.
Closing costs: These are the fees associated with the actual closing of the loan, including the loan origination fee, the appraisal fee, the credit report fee, the title insurance, the escrow fees, the recording fees, and the mortgage insurance.
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As you can see, there are a lot of different fees that can be associated with buying a house. It’s important to be aware of all of these fees so that you can budget accordingly.