Home - Mortgage Loans | Personal Loans | Bad Debt Loans | Foreclosure Loans
Apply for a Loan | Best Auto Loans | Best Bad Credit Auto Loans | Best Bad Credit Loans | Best Bill Consolidation Loans | Best Cash Advance Loans | Best Credit Cards | Best Credit Repair Tips | Best Debt Consolidation Loans | Best Free Credit Reporting Tips | Best Home Equity Loans | Best Mortgage Loans | Best Pay Day Loans | Best Personal Loans | Best Products on the Internet | Best Unsecured Loans
Great Financial Advice
Apply for a Loan
Latest Financial News
Rate Lock Advisory
Best Products
Join Our Mailing List
Contact Us
Loan Articles Index
Auto Loans
Bad Credit Auto Loans
Bad Credit Loans
Bill Consolidation Loans
Cash Advance Loans
Credit Cards
Credit Repair Tips
Debt Consolidation Loans
Debt Reduction Loans
Foreclosure Loans
Free Credit Reporting Tips
High Risk Loans
Home Equity Loans
Home Loans
Lawsuit Loans
Mortgage Loans
Pay Day Loans
Personal Loans
Products on the Internet
Real Estate Services
UK loans
Unsecured Loans
Loan Article Index
Loan Articles A-G
Loan Articles H-Q
Loan Articles R-Z
Mortgage Calculators
Mortgage Calculator
Mortgage Amortization Calculator
Rent vs. Buy Calculator
How Much Can I Afford Calculator
Auto Payment Calculator
Click here to Sign up for Email and Newsletter

 

redhotloantips fat loss


Mortgage Loans 101: How to Prepare for Closing Costs

Written by: Brandon Cornett

Most home buyers understand the basics of home mortgage loans. They know what a mortgage loan is, how interest works, and other fundamentals of the home loan process.

But when it comes to the closing costs associated with buying a home, many of these same home buyers get caught off guard - by both the variety and total amount of closing costs. By understanding and preparing for these costs ahead of time, you can avoid such surprises.

What Are Closing Costs?

Closing costs are the total cost of completing the transfer of ownership of a house. These costs do not include the purchase price of the home. Rather, they are the extras -- fees and expenses aside from the purchase price.

On average, closing costs range between 3% and 5% of the total loan amount. So for a loan of $200,000, closing costs might run $6,000 to $10,000 (3% and 5% respectively of $200,000).

What's Included Within Closing Costs?

Closing costs vary depending on where you live and what mortgage lender you choose. But closing costs often include fees for the following (this list is not all-inclusive):

* Loan origination

* Loan application

* Appraisal

* Document preparation

* Attorney's services

* Escrow agent's services

* Pest inspection

* Credit report / processing

Getting an Estimate of Closing Costs

The Real Estate Settlement Procedures Act, or RESPA, requires that mortgage lenders give you a good faith estimate of all the loan-related fees you're likely to pay at closing. They must give you this estimate at the time of loan application. Keep in mind, however, that these are just estimates. Actual closing costs may be more than the good faith estimate closing costs.

Shop Around

It's a good idea to obtain good faith estimates from multiple lenders. Don't choose a lender based on their interest rates alone. Shop around for estimated closing costs as well.

Just realize that large discrepancies between estimated and actual closing costs are not uncommon. You can prepare yourself for this by having enough money in the bank to cover the good faith estimate amount and then some.

A few days before closing, you will receive another document called a settlement statement, or "HUD-1 statement." This document will give you a more exact tally of the closing costs you'll be expected to pay at closing.

Conclusion

Closing costs include a wide variety of fees and charges. They can add up to a sizable amount, so it's important to prepare for them in advance. Be sure to factor closing costs into the equation when looking for a mortgage lender. Proper planning can help you avoid unpleasant surprises on closing day.

* Copyright 2006, Brandon Cornett. You may republish this article in its entirety, provided you leave the byline, author's note and website hyperlink intact.

About the author:

About the Author

Brandon Cornett is the editor of HomeBuyingInstitute.com, one of the Internet's largest libraries of home buying information -- over 100 expert articles on home buying and home mortgage loans! Learn more at: http://www.homebuyingin stitute.com


Other Related Articles:

Taking the Time to Find the Best UK Loans
When looking for UK loans, it's always important to take your time so that you can compare loan rates and terms from a variety of lenders. Depending upon the type of UK loans that you're looking at, different lenders may offer different rates...read more

Tenant Loans - The Beginner's Guide
If you are a tenant or live at home with your family then you may already have experienced some problems when it comes to taking out a loan. Many of the great rates and deals that you see advertised are, quite literally, of no use to you...read more

Using A Calculator To Assess Your Loan
If you are looking to purchase a new home then you will want to use a mortgage qualification calculator to assist you in working out how much of a home loan you will be able to afford. A mortgage calculator is based around a computer program that...read more


Return to Home

468x60

Best Auto Loans, Best Bad Credit Auto Loans, Best Bad Credit Loans, Best Bill Consolidation Loans, Best Cash Advance Loans, Best Credit Cards, Best Credit Repair Tips, Best Debt Consolidation Loans, Best Debt Reduction Loans, Best Foreclosure Loans, Best Free Credit Reporting Tips, Best High Risk Loans, Best Home Equity Loans, Best Home Loans, Best Lawsuit Loans, Best Mortgage Loans, Best Pay Day Loans, Best Personal Loans, Best Products on the Internet, Best Real Estate Services, Best UK loans, Best Unsecured Loans
Subscribe to Mailing List | Private Policy | Unsubscribe | Site Map