Closing costs are not difficult to understand, but closing costs are very important. Prepare for closing costs in advance. Our associates at RE/MAX Premier Group are professionals who understand the entire purchasing process from beginning to end – including the ins and outs of closing costs. We want you to know all about closing costs before you commit to purchase a property.
A little research about closing costs in advance can go a long way in helping you to understand how the process works. That way, there are no surprises at the end of the transaction when closing costs come due. Closing costs catch some people by surprise. By reading about and understanding closing costs, you are arming yourself with useful information.
Real estate is usually transferred from buyer to seller at closing. At that exciting moment when the closing is taking place, the title will be transferred from the seller to the buyer and the lender will expect closing costs to be paid. The lender will require some closing costs to be paid up front, such as the appraisal fee. Depending on the terms outlined in your Sales and Purchase Contract closing costs could include:
- Loan origination fees: Closing costs include loan origination fees charged by the lender originating the loan.
- Points: It is sometimes a good idea to prepay interest in closing costs in order to “buy down” the loan interest rate. This payment included in closing costs is known by the term, “points.” One point equals one percent of the loan principal.
- Appraisal fees: Appraisal fees are included in closing costs and are usually paid by the buyer.
- Title search fees: It is customary for title search fees to be included in the seller’s closing costs. A title search guarantees the buyer and the lender that the title to the real property is clear.
- Title Insurance as Title Evidence: Seller will convey marketable title to the property through title insurance commitment issued by a Florida licensed title insurer in the amount of the purchase price. It is customary in our area for the seller to pay for this expense.
- Property insurance: Lenders often require a portion of property insurance be included in the closing costs. The seller may offer to pay part of these closing costs. In some cases the buyer will pay insurance premiums directly to the insurer.
- Attorney fees: Attorney fees may be included in closing costs. The buyer and seller may incur this cost if they choose to have an attorney represent them.
- Deed recording fee: The charge for filing a change of ownership with the government may be included in closing costs. The terms in the REP Sales and Purchase Contract will determine who pays these closing costs.
- Credit report: Lenders will require a credit report for the buyer. The buyer traditionally pays this when he or she applies for the loan. The amount may also be included in closing costs.
- Broker fees: If a broker is involved, fees are usually based on a percentage of the total sales price and included in closing costs.
- Other lending fees: There are many other potential fees included in closing costs such as prepaid property taxes. When your lender provides you with a “Good Faith Estimate” of what your closing costs will be, read it carefully.
RE/MAX Premier Group will explain closing costs to you in detail. Call us today at 813-929-7600, visit us at 27219 SR 56, Wesley Chapel, Florida. You can always e-mail us at Info@PremierHomeStore.com.