Closing Costs: The Ins & Outs
Costs you need to pay at closing
The final step of purchasing your home is the closing, where you sign the documents and get the keys to your new home. There are a number of costs that you’ll pay at closing, so you’ll need to be prepared to factor that into your budget.
Your Home Lending Advisor will review your mortgage details and help you understand your closing costs. You also need to bring a certified check that day to cover all closing costs.
Find out what closing costs are and why they're necessary.
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How much are closing costs
Three business days before closing you'll receive a Closing Disclosure. This document itemizes all of the funds and costs paid by the buyer and seller either at or before closing. This document will show the loan amount, interest rate, loan term, origination fees, title insurance, deposits for property insurance and taxes, homeowners insurance and any other fees. Review the Closing Disclosure carefully and compare it to the Loan Estimate you received to make sure there are no surprises.
You’ll receive a Final Closing Disclosure during your closing. This is the final version of the document you received 3 business days before closing. Check for any last minute changes.
The most common closing fees are:
- Appraisal fee—For the estimate of your home’s market value
- Attorney fees—For any legal representation to prepare and record documents
- Inspection fee—For examining for structural problems; also for termites, lead paint in older homes and your roof
- Origination fee—For processing and administering your loan
- Underwriting fee—For reviewing your mortgage application
- Title fees—For the search to verify there are no tax liens on the property and for insurance to protect you if a problem is discovered
Who pays the closing costs
There are also fees you may have to pay for applying for your loan, running your credit report, recording your purchase with the local government and surveying your property.
In some cases, your seller may pay some of your closing costs, especially if they’re motivated to sell quickly, but this comes with limitations.
Your Home Lending Advisor can answer any questions or help you understand your Closing Disclosure, so you can plan ahead for your closing costs.