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Module 5
Steps for Buying a Home
Closing the Loan
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Closing Costs

Your Easy Reference Guide to Closing CostsThe closing costs are itemized on the HUD-1 Settlement sheet. You should review this sheet closely and check for inaccuracies. The following chart gives you an easy reference guide to these costs. Remember to compare the actual costs against the Good Faith Estimate provided to you at the time of loan application. Do not hesitate to ask the settlement agent to explain any costs that you do not understand. No dollar figures have been assigned to items in this chart since the costs vary from one location to another. In some cases, a seller may have agreed to pay a percentage or set dollar amount of the closing costs normally charged to the buyer.

Download NowDownload the Closing Costs chart now.
Closing Costs

Closing Cost

Charged By

Purpose

Who Pays

Origination or Lender fee Lender Covers costs to originate the loan Buyer or Seller
Discount points Lender Prepaid interest to buy down the interest rate Buyer or Seller
Per Diem interest Lender Daily interest from settlement to end of month Buyer
Appraisal fee Appraiser Determines the fair market value of property Buyer
Credit report Credit reporting service Provides credit history and score to determine lending risk Buyer
Assumption fee Lender Covers lenders costs when loan is allowed to be assumed Buyer
Escrow (Impound) reserves Lender/servicer Two months’ worth of insurance premium and property tax to start escrow fund (additional months of tax payments may be required at settlement depending on when taxes are due) Buyer
Mortgage insurance premium Mortgage insurance company May be paid in part at closing; usually divided by 12 and added to monthly mortgage payment Buyer
Homeowners insurance policy Insurance company Provides hazard and liability protection on the property Buyer
Homeowner warranty Warranty company Insures heating and cooling systems and appliances Buyer or Seller
Title search Settlement agent Search for ownership, liens and any title defects  Buyer or Seller
Title insurance policy Title insurance company Protects insured from adverse claims and liens on the property Buyer
Transfer fee State/county     Government charge for conveyance of property Seller
Recording fees City or county Government charge for recording deed, mortgage or deed of trust, riders, asignment, releases Buyer and Seller
Real estate agent fees Real estate broker Commission paid to listing and selling agent Seller
Reimbursement to seller Seller Reimbursement to seller for prepaid taxes or any other prepaid property items Buyer
Attorney or  settlement agent fees Attorney/settlement agent Pays for handling and disbursing the closing Buyer and Seller
Termite or pest inspection Inspection company Certifies the property was inspected for insect damage and treated if needed Seller
Survey Surveyor Determines exact boundaries of property Buyer or Seller
Download the Closing Costs chart now.Download Now

Additional Fees May Be Open to NegotiationSome additional lender fees that appear as closing costs but may actually be open to negotiation include:
  • underwriting fee
  • document prep fee
  • courier fee
  • processing fee
The settlement agent might also charge a wire transfer fee or notary fee.

corner Caution:
At the closing, watch out for any changes in rates, charges in excess of those originally quoted or additional loan features that were never discussed. Take your time to review all documents carefully. Do not feel pressured – after all, it is your money!

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