CLOSING COSTS

When you buy a home, you'll need more than the down payment to finalize the purchase. Closing costs average about four-and-a-half to five-and-a-half percent of the amount of the mortgage. Some of the more common costs are listed below. Check with you REALTOR or lender for details on closing costs, and what to expect.

Loan discount points, a loan origination fee, credit report fee, assumption fee (if the buyer's existing mortgage is transferring to you) are all fees paid to the lender.

Lenders generally require buyers to repay the interest on a mortgage from the date of closing until the end of the current month. There is usually a prorated amount of property taxes, and at least 14 months of homeowner's insurance premiums. These monies are usually held in escrow and then are used by the lender to pay the taxes and insurance premiums as they become due. Federal and state guidelines specify the maximum amount that can be held by a lender.

In addition to these charges and fees, costs for the survey of the of the property, appraisal, a termite inspection, building inspection and other inspections may be required by the lender.

Closing costs and who pays them vary by region, and are often negotiable between the buyer and seller. Closing costs may also be specified by the particular type of mortgage. If you qualify for a VA or FHA loan, closing costs may be reduced.

As always, your real estate professional can advise you on what to expect, and how these fees are assessed in your area.