What is closing cost?

When you apply for a mortgage a lender is charging you interest rates for lending you money. Lenders also charge for closing cost for origination of your

new home loan. There are many associate cost relating to your home loan closing.  You should be aware where those costs is coming from and how to

save on them. Some of closing cost may be related to your loan application, while other fees are related to the house itself. You have a option to

borrow money from lender to cover your closing cost but you should be aware of those expenses and interest rates relating to it. Lenders cost to

borrow money for closing is between 3 % and 6 % t of the amount being borrowed and is also depend on your credit score and credit report.  The

difference in percentage is because different states require different taxes and fees to be included, it is impossible to come up with a generalization that

applies to loans nationwide.  

What typical closing cost include?

Typical closing costs include loan application fees and credit report from Trasunion, Equifax and Experian because when you taking a home loan banker

often check a credit report from all of those 3 agencies in order to find your average credit score. Closing cost also cover for title search , insurance fees,

property appraisal, lender’s attorney fees, inspection, boundary survey , recording fees, transfer taxes, buyer’s attorney, document stamps, points and

origination fees ( if you have a great credit score , more than 750 fico, you should discuss with your banker to remove   points from your mortgage

loan). Escrow accounts are often required for many loans for homeowners insurance, real estate taxes, and homeowners associations and require cash

deposits at closing but you may request from bank to borrow money for closing.

 After your initial meeting with a mortgage professional, you should receive a Good Faith Estimate (GFE) that shows all of the closing costs associated

with your mortgage application. If a mortgage officer don’t want to provide you with this document just ask for those document. This estimate is

required by The Real Estate Settlement Procedures Act and must be given to you within 3 days of applying for the loan but mostly bank officer will give

your right away when you receiving your pre-approval notice for a loan.

You may be able to negotiate some of the fees included in your closing costs, before you even try to negotiate with a banker, you should check your

 credit score from all tree credit report agency Trans union, Experian and Equifax so you will know for how much you qualifying for and what interest

rates you may receive. Things like credit reports typically cost the same with every mortgage program. However, if you see that your preferred lender

seems is offering a great deal but is over-charging on closing costs, point out the discrepancies and ask them to lower certain charges. Keep in mind,

most third party fees have been previously negotiated between the mortgage company and the third party, and may not be able to be reduced. Also,

watch out for “junk fees” that are included with most mortgage programs. Once you identify a junk fee, try to negotiate it down or eliminate it entirely

before accepting the loan.