Additional Costs to Close a Mortgage
The most important question a home buyer asks is “How much can I afford?” A buyer needs to know the maximum purchase price of homes that they should be looking at. Smart Miami buyers know that there are closing costs involved in the purchase of a house, above and beyond the purchase price. Your team of professionals, including a lender, possibly an attorney and a real estate broker should be able to ensure that the only surprises at closing are pleasant ones.
Following are normal closing costs that might be included with your property purchase. These costs can be state specific, and even county specific, so be sure to talk with your lender about which of these costs apply to you.
Lender Fees - Some fees will vary from lender to lender, so in addition to shopping for the best rate for a loan, you should also pay attention these additional costs. The fees that might be assessed by your lender or other outside parties can include:
Underwriting fee Administrative fee Points (cost to buy down the rate) Flood certification fee (to determine if the property is located in a flood zone) Tax collection fee (to make sure they are notified of property taxes due and paid Origination fee
Appraisal: In almost all cases, an appraisal will be required to determine, as accurately as possible, the real value of the property you are purchasing.
Credit Report: All lenders will pull a credit report. Most lenders require what is known as a “tri-merge report.” The charge for this report is minimal and will be expected to be paid up front, in most cases.
There are also charges assessed by a Title Company or Transfer Agent, in addition to special fees that may be charged by your city, county and state.
Deed and Mortgage Documentary Stamps: Documentary stamps may be charged for recording the deed with the county. A second set of documentary stamps could be assessed for recording the mortgage.
Intangible Tax: The actual mortgage is considered intangible property which could also be taxed. This tax for the mortgage is assessed similarly to the doc stamps, except that it is calculated on the loan amount.
Recording Fees: The County assessor charges you for each page of the documents needed to record your deed.
Title Insurance and Escrow Fees: Title Insurance protects you and the lender. It guarantees clear title to the property at the time the loan closes. The Title Company will also very likely charge an escrow fee to pay for their services. Additional escrow and title fees are not unusual.
In some states, an attorney may be involved in the closing process, instead of, or in addition to a title company.
Pre-paid expenses are in addition to closing costs. These can include property insurance, property taxes, and accrued interest.
You will be furnished a Good Faith Estimate of all closing costs by your lender, within 3 days of applying for your loan. As a general rule, you should expect your total closing costs to average between 1% - 3% of the total loan amount.
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