Closing Your Mortgage

Helpful Hints on What You Can Expect

Closing on a new home should be an exciting time.But to some, it ends with the unwelcome surprise of cost increases. Closing costs are one of the least understood aspects of the home buying process. This overview can help you understand the costs involved at closing –and hopefully help prevent unexpected surprises.

I’d be happy to provide complete details about closing costs – and our range of affordable home financing products. Whatever your home financing needs, I’m ready to help.

Closing costs tend to vary from lender to lender,but are generally considered any costs associated with the purchase of a home.

Today, these costs range between 2 and 7 percent of the home’s purchase price and include three basic categories: OUT-OF-POCKET EXPENSES – FEES FOR:

•Appraisals
•Attorneys
•Credit reports
•Deed recording
•Tax services,and
•Other miscellaneous expenses,usually performed by a third party and directlycharged to the borrower

PREPAID EXPENSES – INCLUDES:
•Homeowner’s insurance
•Mortgage insurance,and
•Costs to set-up an escrow account (Escrow accounts are a service provided by the lenderthrough which they will pay annual insurance premiums and various taxes on theborrower’s behalf.The amount that goes into these accounts is based on the first year’s premiums, plus an additional amount to help build the account for future premiums.)

MORTGAGE POINTS A mortgage point is equal to 1 percent of the mortgage loan amount. When you pay apoint(s) it actually helps reduce the loan’s interest rate.For example,paying two points on a $100,000 mortgage would require an additional $2,000 up front at closing, but would cut the monthly mortgage payment. If you obtained the same loan amount at zero points,the interest rate and monthly payment would be higher, but there would not be any additional up-front costs at closing.