What do I pay at Closing?

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Closing costs can be a painful surprise to home buyers.

These are estimated fees only! Some Title companies and Lenders might have other fees that they might charge. 

Be in charge of what you pay!

Call around to lenders and closing companies for prices.

You as a consumer Buyer or Seller have the right to chose your lender and closing company

They’re are a range of expenses and services when buying a home. The majority of closing costs will fall on the buyer, but the seller will be responsible for some as well. This is why you should educate yourself and save yourself some money during the process no one else will do this for you!

In most cases, buyers can expect to pay between 2% and 5% of the purchase price on closing fees. So, if the home costs $200,000, expect to pay between $4,000 and $10,000 in closing costs.

  • Understanding how closing costs work and what they cover will help you budget accordingly to ensure a smooth transaction in the final stages of buying a home.

What can I expect to pay at closing when buying a home?

Closing Cost from Lender

Most of these fees are rolled into the loan. Each Lender will disclose to you about the fees when you apply for a loan.

  

1. Appraisal Fee

Lenders need to know how much a property is worth before they can approve a loan. There are two main reasons for this.

· To make sure the amount you want to borrow is justified.

· The lender needs to be able to recoup the value of the home if the buyer defaults on the loan.

The cost associated with an appraisal will vary depending on the complexity of the process and the location of the property. But the typical cost of a home appraisal is $300 to $500.


2. Application Fee

An application fee covers the cost to process a request for a new loan.

It includes costs related to administrative expenses and sometimes covers credit checks depending on the lender. Some lenders will charge an application fee just to make sure that the buyer doesn’t go elsewhere for a loan.

Application fees can be as low as $25 or as high as $250.


3. Credit Report

Lenders need to run a full credit report on a buyer before offering the terms of a mortgage loan.

In some cases, the credit check will be included in the application fee. But it’s not uncommon for lenders to charge a borrower separately for a credit report.

Credit report fees are usually $20 to $50, at most.


4. Origination Fee

The loan origination fee is also known as the underwriting fee, processing fee, or the administrative fee. Lenders charge an origination fee to evaluate and prepare a mortgage loan.

It covers notary fees, document preparation, and the cost of the lender’s attorney.

Origination fees are usually based on the amount of the loan. Buyers should expect to pay about 0.5% -1.5% .of the amount borrowed. 


5. Prepaid Interest

Interest accrues on mortgage loans between the settlement date and the due date of your first monthly payment. Lenders typically require the buyer to pay the interest accrued during this time.

As a buyer, you should be prepared to pay this amount at the closing. The cost of prepaid interest fees will depend on the size of your loan.


6. Mortgage Broker Fee

Mortgage brokers act as a middleman between borrowers and lenders. If you hire a mortgage broker, they’ll work on your behalf to find competitive interest rates and loan terms from different banks and lenders.

While a broker can help you get a good deal, they’ll need to be compensated accordingly.

Mortgage brokers are either paid by the lender or the borrower. Compensation ranges from 0.50% to 2.75% of the loan amount. Federal law prohibits mortgage brokers from making more than 3%.


7. FHA, USDA, and VA Fees

All loans insured by the Federal Housing Administration are subject to FSA mortgage insurance premiums. Loans guaranteed by the US Department of Agriculture or the Department of Veterans Affairs are subject to guarantee fees as well.

· The FHA requires an upfront prepayment of 1.75% of the loan.

· The USDA loan upfront guarantee fee is 1% of the loan amount.

· VA guarantee fees are between 1.25% and 3.3% of the loan amount, depending on the down payment.


8. Mortgage Insurance Fees

Some lenders will require you to pay a year’s worth of mortgage insurance premiums upfront. Other lenders require a lump-sum payment to cover the entire duration of the loan.

Mortgage insurance fees typically cost between 0.55% and 2.25% of the purchase price.


9. Homeowners Insurance Premium

Most lenders will require the buyer to purchase a home insurance policy before the settlement is finalized. This keeps you protected in case of damage, vandalism, burglary, and more.

If the property has an HOA fee, the association might include insurance premiums in the monthly dues. So if you’re buying a condo or other property with an HOA, be prepared to pay those dues upfront as well.


10.  Prepaid Escrow  Fees

 Prepaid are paid by a home buyer at closing and put into an escrow account to cover the initial costs of expenses, such as private mortgage insurance, hazard insurance, taxes. These are usually the total amount ot what the cost is for a year divided by 12 months.,you can expect to have anywhere from 3 months on up to be held in Escrow for you.  


11. Discount Points

The discount points, also known as discount fees, are paid to the lender to lower your interest rate. This is commonly referred to as “buying down the rate.”

For example, if you pay 1% of the loan amount (one discount point), the lender will reduce your interest rate by a specific percentage amount. In most cases, paying one point reduces the rate by 0.25%, but this varies depending on the lender, loan type, and current interest rates.



Closing Companies Fees

Closing Company Fee

An escrow company is responsible for handling all of the funds involved in the real estate transaction. It’s their job to make sure all parties fulfill their payment obligations and get paid appropriately.They also will make sure that that all documents from lender is signed .

For example, at the time of the closing, the buyer will wire a down payment and closing costs to the escrow account, and the lender will wire the loan amount to the account as well. The closing company pays off the loans, pays third-party providers, and sends the remaining funds to the seller.

The Settlement fees vary from $300.00  to $600.00

  

Attorney Fees

Usually the title company has an attorney sure that all documents to the property have been filed correctly on the property and there is no issues with chain of title. 

Attorney fees vary  from $350.00 to 500.00 depending on what they have to do for the transaction.

  

Title Search Fee

The purpose of a title search is to ensure that  no documents have been filed from the time the attorney reads abstract until the filings of the deed of title.

The cost for a title search will vary based on the company and region, you should expect to pay about $275.00 - $300.00


Mortgage Inspection Plat Fee

Getting a property  mortgage inspection plat is used to to show any improvements identification and location purpose only. This is the most ordered by the closing companies, unless otherwise told to have a different kind 

This fee can either be paid by the buyer or the seller. The Cost for a can be from $250.00 -$500.00. 


Title Insurance

There are two types of title insurance that are associated with closing costs:

· Lender’s Title Insurance — Lenders require this loan policy as protection if there is an error in the title search. Coverage lasts until the loan is paid off in case someone claims ownership of a property after the sale.

· Owner’s Title Insurance — This coverage protects you, as the buyer, in case claims are made against the property after the closing. Coverage lasts as long as you own the property and typically costs about 0.5% to 1% of the purchase price.

Sometimes discounts are available if the lender and owner purchase a protection policy at the same time.


Wire Fees

These fees are charged for money that has to be wired in and out of a escrow account for a transaction.

The fees for this can range from $35.00 - $150.00


Shipping Fees. 

This fee is for overnight packages from Seller sometimes buyer and for the lender. It can cost anywhere from $75.00 to $150.00 depending on how much is shipped.


Document Preparation Fee

Preparing documents for transaction and for any other issues that come up during the closing. The fee for this can be $75.00 - 300.00


Filing Fees

This can be for anything filed for the transaction at the county clerk's office. The price for this is $18.00 first page and 2.00 dollars for every page after that per document. Mortgage tax will also have to be paid to the county treasurer if there is a mortgage involved. The cost of this is .10 per 100 for 5 or more years,  and a 5.00 dollar certification fee.


Seller Fees

Abstract

Oklahoma is an abstract state. That means that the abstract will have to be brought up to date to be able to sell the property. this is usually a seller charge and it can start at $450.00 on up. 

 

Real Estate Commission

Real estate commission fees are split between the buyer’s agent and the listing agent. Commissions can range from 5% to 8% of the sale price, 

The commission fees are almost always paid by the seller, unless otherwise negotiated.


 UCC financing statement

 A UCC financing statement is a legal form used by a creditor or lender to file so that notice is given that there may be an interest in property owned by someone. UCC liens, and it is important to check if these exist with a property before going any further with a transaction. This can run from $75.00 to 95.00


Bankruptcy Search

This is done for every transaction to make sure that seller has not filed bankruptcy or that the spouse has not and that they do have clear title.This can run from $75.00 to $100..00


Documentary Stamps.

These are paid by the Seller when they transfer title to the Buyer. It is paid on the title before recording at the courthouse. The cost on this is  is $.75 per 500 of sales price.


Filing Fees

Sometimes a release or something that needed to be prepared for clearing the title will need to be filed by the seller.


Payoff of loans or liens or Judgments

If the Seller has a loan on the property of any kind, it must be paid off at time of closing.


Wire Fees

Payoffs are usually wired and there is a charge for that  or for sellers proceeds at closing. The fees can be $35.00-$150.00


Taxes

Taxes will be prorated for the portion of the months that a seller has owned the property.