What are closing costs?

attorney fees, closing, closing costs, fees, good faith estimate, HUD, HUD-1, loan origination fees, tile, title charges

crystalbrownrealty

By Jane Hodges

 

Many homebuyers mistakenly arrive at closing unprepared for a laundry list of closing costs: major and minor fees that are a routine part of any home purchase. This can be because the lender increased fees on lender-controlled aspects of a transaction, or because a buyer chose a third party (appraiser, inspector, attorney, title company) that might charge higher prices than those estimated by the lender.

Fortunately, new rules and regulations provide more clarity on theclosing costs that borrowers can expect to pay. As a rule of thumb, homebuyers can expect to pay closing costs equivalent to 3 percent to 5 percent of their loan amount, says Guy Cecala, publisher of Inside Mortgage Finance, a Bethesda, Md.-based mortgage research firm. This is money that the homebuyers will spend in addition to their down payment, and those stretching to buy should know that they’ll need to cover these…

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