Buying a home with the help of a loan comes with other costs. The costs associated with financing a home should be part of your budget. These mortgage fees come under the umbrella of your closing costs and are typical of most loans. You can expect to pay 2% to 5% of your loan amount in closing costs.
There will be fees that you pay directly to the lender. The loan origination fee and any discount points to bring the interest rate down are usually percentages of the loan amount. The lender will also require a loan processing fee, an underwriting fee, a cost for document recordings and fees for any wired funds. Application and credit report fees are included as well. If your loan is an FHA loan, then you will be charged an up-front mortgage insurance premium.
Depending on what an individual state requires, there will be a fee for a lender’s title insurance policy, which insures any defects that may not have shown up in a title search and is also a cost to you. This may be in addition to the cost of a homeowner’s title insurance policy if the seller is not paying for it.
Third-party closing costs may include an appraisal fee, the cost of a survey, attorney fees and a charge for a title company representative to supervise the closing and title transfer.
At closing, there may be additional charges associated with prorations for property taxes, homeowners and mortgage insurance and HOA fees. The lender may also require you to deposit funds into a reserve or escrow account to cover upcoming taxes and insurance.
Call or email me to get an idea of exact costs in your area or for a specific price range, and let’s find the loan that works best for you.