When applying for a mortgage, you will most likely receive a document called “the loan estimate”. This docent specifies all of the associated costs to obtaining a mortgage. The news and many other publications warn about predatory lenders. So how do you know that you are getting a fair deal on your mortgage? By understanding what closing costs are and how they are calculated.
Property Related Fees
The property has many fees associated with it including the appraisal fee, water tests, and septic inspections. Make sure to ask for the invoice to make sure you are being charged the correct amount. If you are required to get a water test or a septic inspection, research the cost. Make sure you understand what is included in the services and remember, you have a right to choose your service provider.
Whether you are using a title company or an attorney to close your loan, they will have multiple fees associated. The first fee is the settlement charge. Typically this fee runs around $600 but can be as high as $700. Title insurance will also be required and is typically .95% of the loan amount. Make sure to talk to your attorney or title company to fully u derstamd what the charges are. Remember, you have the right to choose your settlement provider.
To learn more about closing costs, I highly recommend visiting Bank of England Mortgage and reading Closing Costs Explained.