How mortgage closing costs can be

Closing costs are a factor you must account for consider
when taking out a mortgage to buy or refinance a home. Here’s what you
need to know across the board…

When can you take out a mortgage there’s fees that you’re going to pay to various service providers besides just the mortgage company. This includes, but is not limited to:

• Lender fee
• Title fee
• Escrow fee
• County recording fee
• Notary fee
• Appraiser fee
• Pest inspector fee
• Home inspector fee
• Insurance provider fee

Closing costs are comprised of both non-reoccurring and reoccurring closing costs.
Non-reoccurring closing costs are the one time fees that you pay when
you mortgage a home such as lender origination, appraisal, title,
notary, doc prep, every fee paid just one time in conjunction
with completing the transaction. Re-occurring closing costs include
interest, insurance, taxes which are normal carrying costs associated
with owning real estate.

Total closing costs versus real closing costs. Total closing
costs include all reoccurring and nonrecurring closing costs. Real
closing costs are the non-reoccurring closing costs that you pay one
time to take out a mortgage. Real closing costs is your cost to borrow
the money.

Following scenarios are assuming a no points loan. Points
are nothing more than upfront overhead you can use to purchase a lower
rate of interest and subsequently a lower monthly payment.

Here is closing costs and how they relate to purchase price:

• Purchase price $200k-$300k closing costs $7-8k
• Purchase price $300k-$400k closing costs $9-10k
• Purchase price $400k to $500k closing costs $10-$11k
• Purchase price $500-$600k closing costs $11-$12k
• Purchase price $600-$700k closing costs $12-$13k
• Purchase price $700k-$800k closing costs $13k-$14k
• Purchase price $800-$1 million closing costs $15K-$16k

Note to all of these scenarios account for setting up for an impound
account for property taxes and insurance and is reflective of total
closing costs including both re-occuring and non-reoccuring closing
costs.

Refinancing contains lower fees and one form of title insurance is needed, a lender’s policy.

Following is closing costs for no points refinancing:

• Loan amount $100k-$400k $3k range
• Loan amounts $400-$600k $3,500 range
• Loan amounts $600k-$1 million 1,000,000 $4k range

These scenarios are meant to provide a baseline for your home
project. These refinance figures are also reflective real closing costs
only, thus not accounting for any prepaid taxes or insurance.

If you’re planning to purchase a home or refinance one you already own be prepared for the fees.

Closing costs
can be financed, paid for in cash or can come in the form of a gift.
Additionally, these can come in the form of the seller credit when
buying a home.