Monday, March 27, 2006

Closing Costs

Everybody's heard the term closing costs, but what exactly makes up closing costs? For buyers it consists of all the fees charged by title, escrow, and the lender. You'll have fees such as the escrow fee, along with loan fees like points and the appraisal fee. In addition, you'll have prepaid interest on your loan, any property taxes due at the close, and the cost of your homeowners insurance policy. So, if you are a buyer, closing costs are everything except your down payment.

For sellers, it's much the same, however, you won't have new loan costs. You will possibly have commission costs to sell your home, the cost for pest control work (termites!), title and escrow, interest charges on your existing loan and the principal payoff, and any unpaid property taxes.

Your escrow agent can give you a pretty close estimate of your total closing costs once you've opened escrow. If you haven't opened escrow yet, your real estate agent or lender can give you a rough estimate.

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