There are lots of things that need to be taken into account when you are planning to buy or sell property. One of those things is known as closing costs and it is something that first time buyers may not be aware of. These come from a variety of fees and often overlooked expenses. So what are these closing costs?
There are lots of factors that need to be looked into when it comes to closing costs, and can include inspections, loan fees, government recording charges, and title charges. These costs are generally covered by the buyer, although there are also instances in which the buyer can ask the seller to cover some part of the closing cost fees. To help provide you with a clearer picture about closing costs, we will go into more detail.
Closing costs can change according to the area and the type of transaction that is done. However, in general the things that make up closing costs and are included in them are:
• The cost of conducting surveys
• Inspections and appraisals
• Title search fees
• Courier and Funds transfer fees
• Loan origination fee
• Mortgage and deed preparation costs
In general, the majority of the fees that are included in closing costs are part of the buyer’s deal, which is why buyers generally have to take responsibility for the payment of closing costs. Closing costs vary according to the state, type of agency and transaction that are involved in the entire deal. All buyers should acquire an estimate of the closing cost fee that they are liable to pay in order to avoid surprises at the end of the deal. Lenders are required by law to give you this, also known as a GFE (good faith estimate).
When it comes to sellers fees, they don’t have to worry about closing costs as much as the buyer. The only thing they will be required to do is take care of the loan payoff costs, agent’s commission, associated penalties, notary fees, homeowner association fees and transfer taxes.
When it comes to closing costs, the vast majority of the fees fall upon the buyer, and they are the ones who usually have to decide how to pay it. They can choose to pay it outright, through wire transfer or with a cashier’s check. They can also choose to negotiate with the seller in order to cover some part of the costs in a sale. In addition, some lenders offer loans with the closing costs rolled into the mortgage. This option will almost always cost the buyer more in the long run, as they will end up paying interest on these items.
A lot of first time buyers and sellers are confused about the closing costs and the types of fees that are included in them. If you face any confusion, you should never hesitate to ask your mortgage broker or your agent to explain them to you.