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Mortgage Loans -- Closing Costs

Mortgage loan closing costs [or settlement costs] are the miscellaneous expenses involved in the transfer of real estate from one owner to another.  They are paid when the home buyer and the seller meet to exchange the necessary papers for the house to be legally transferred. On the average, mortgage loan closing costs run approximately 2% to 3% of the house price. This percentage may vary, depending on where you live, and are usually comprised of the following:

 

 

  • Attorney's or escrow fees (yours and your lender's, if applicable)
  • Property taxes (to cover tax period to date)
  • Interest (paid from date of closing to 30 days before first monthly payment)
  • Loan origination fee (covers lender's administrative costs)
  • Recording and survey fees 
  • First premium of mortgage insurance (if applicable)
  • Title insurance (yours and your lender's)
  • Loan discount points
  • First payment to escrow account for future real estate taxes and insurance
  • Paid receipt for homeowner's insurance
  • Any documentation preparation fees

 

The sales agreement states who will pay which costs.