Home buyers often wonder what types of fees are involved with financing a home purchase. This is a list of the most common 8 fees you should expect to pay at closing.
8 Fees You Should Expect to Pay at Closing
1. PROPERTY TAXES – The amount you pay will depend on the month you close because property taxes will be pro-rated between the buyer and the seller.
2. HOMEOWNER’S INSURANCE – Home buyers are required to pay for an entire year’s premium of homeowner’s insurance (also called hazard insurance) at closing.
3. PREPAID INTEREST – The amount you pay will depend on the day of the month that your home loan closes. This fee can vary from a full month’s interest to only a few days worth of interest.
4. PRIVATE MORTGAGE INSURANCE (PMI) – Some buyers will have to pay PMI but this will depend on the amount of your down payment. If you meet the minimum required down payment then you will not have to pay for PMI, otherwise there will be a charge for PMI that will be placed in an an escrow account.
5. TITLE INSURANCE FEES – These charges will cover the buyer’s title policy and also the lender’s title policy (ALTA). The title company may have other fees associated with title search, settlement, recording, notary, document preparation, and/or title examination fees. These fees will vary from title company to title company.
6. ADMINISTRATIVE, LOAN PROCESSING, AND UNDERWRITING FEES – All of these fees are charged by the lender and will vary from lender to lender so it is important to shop around. These fees are charged for processing your loan request, gathering all of the required documentation, and evaluating your home loan application package.
The fees listed below may also apply to your situation, however they are not standard fees across the board for all home buyers.
7. LOAN ORIGINATION FEE – This is a fee that is charged by the lender for administrative costs involved with creating or “originating” the new loan. This is typically expressed as a percentage of the total loan amount.
8. LOAN DISCOUNT/POINTS – These are typically referred to as points in the mortgage world which is just another term used to describe a fee paid for by the buyer to lower their interest rate. One point is equivalent to 1% of the loan amount.
Keely Semon is an experienced, local Gilbert Realtor, serving the areas of Gilbert, Chandler, Queen Creek and the surrounding areas. Keely would be honored to assist you on your real estate journey and help you navigate through the process of buying and selling AZ Real Estate. If you would like a FREE market analysis of your home’s current value, then please don’t hesitate to contact Keely. Or, if you are simply curious about what your neighbor’s home sold for down the street, then all you have to do is ask!
Keely Semon
Gilbert AZ Realtor
United Brokers Group
480.220.1321
Keely Semon | Arizona Real Estate Specialist 