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Mortgage Closing Costs and You
by Debbie Wilson
CMR Columnist
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Taking ownership of your new home loan can be extremely exciting and satisfying. But before you can claim that ownership, you'll need to sign important mortgage documents and pay critical closing costs. Are you ready to negotiate your California home loan?
Closing Cost Fees
Upon the closing of your California home loan, you'll find yourself paying various fees and costs. And while these fees vary from lender to lender and mortgage to mortgage, the following represent the most typical types of closing costs you're likely to encounter:
- Credit Report: The cost to obtain your credit reports.
- Appraisal: Fee charged to estimate the fair market value of your home.
- Application: Flat fee to cover processing of your mortgage application and documents. Also called processing, administration, or underwriting fee.
- Title Search: Ensures that your new home is free and clear of any encumbrances.
- Inspection: Fees cover cost of property, pest, septic, and other related inspections.
- Origination: Usually 1 percent of the loan amount, which covers some or all of the loan costs.
- Points: Each point is 1 percent of the loan amount. Most frequently paid to obtain lower rates or better terms.
- Prepaid Interest: Paid to cover interest charged between closing date and the first payment date.
- Miscellaneous Costs: These may include attorney, survey, notary, and inspection fees.
Because mortgage closing costs can total thousands of dollars, take time to check the fees carefully before choosing your lender and review your Good Faith Estimate (GFE) before selecting your California home loan. You'll be glad you did next time you sit down to sign your closing documents.
Source:
Consumer's Guide to Mortgage Closings
About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a BA in business management.
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