Mortgage Loan Closing Costs for Refinance Loans and Home Purchase

Mortgage Loan Closing Costs for Refinance Loans and Home Purchase

If you are trying to get a mortgage loan, for any reason (home purchase or refinancing) you will be paying the closing costs … period. Let me clarify with regard to the purchasing of a house … the seller may pay any or all of the closing costs in a deal, but it generally just decreases the selling price of the house and decreases or removes the purchaser’s need for cash or closing costs to be financed. Harbor View Funding provides more info.

While many mortgage lenders, brokers, banks, lawyers, or whoever can tell you that you can get a loan with zero closing costs, the truth is that they simply don’t exist. You’ll be paying / incurring closing expenses one way or another.

That said, there are many ways to cover the closing costs: with a deal, the seller may offer to pay any or all of the closing costs that will minimize the cash outlay for closing costs. In most situations, you may opt to pay a higher interest rate to reduce or remove closing costs. The other choices are just some variation of the ones mentioned above.

Estimating closing costs Factors that are part of, or deemed to be, closing costs include: Mortgage origination fee Lenders fee-if using a mortgage broker Debt report fee Appraisal fee Collection fee Wire transfer fee Underwriting fee Report Title Insurance Closing or Escrow fee Filing fee Attorney fees Pest inspection Tracking and/or transfer fees Paper Prepared fees Others need it, others don’t. Many could be negotiable, others might not. Others can differ from lender to lender, from lender to broker, from broker to broker, or from title to title company; others may not.

Such products that are NOT known to be closing costs, but that need to be taken into consideration when attempting to measure any cash out of pocket or loan size, include the followng: Deferred interest Mortgage Insurance Premium Hazard Insurance (homeowners insurance premiums Reserves to cover future property taxes, homeowners insurance and mortgage insurance premiums Flood insurance premiums

You have the option to select the title company you are closing with-but, in most situations, the seller has already formed or set up a preliminary escrow with a title company in a purchase transaction. That doesn’t mean you can’t claim to adjust it. Only bear in mind that the seller may not be able to change the title company and the sales contract that / should specify the place of the closing. That also doesn’t mean you can’t opt to adjust it, just anticipate some opposition In most situations an evaluation is needed-the only exceptions to that are usually limited lines of credit for home equity and/or very low loans to value. In this case, the lender may make the final decision if an appraisal is needed It is a condition that you obtain a Good Faith Settlement Charges Estimate within 3 days of applying for a mortgage loan-if you do not obtain one, make sure that you ask for one, you will only be charged the exact cost of the credit report and the appraisal. It’s just meant to give you an idea of what might be used as closing costs and you’ve got a clear idea of what to expect.

Robert Cline