What Will Your Payments Be?
Carolyn McGill
304-775-5110
304-775-5110
What are the Interest Rates Today?
What Are My CLOSING COSTS?
The bundle of fees associated with the buying or selling of a home are called closing costs. Certain fees are automatically assigned
to either the buyer or the seller; other costs are either negotiable or dictated by local custom.
Buyer closing costs
When a buyer applies for a loan, lenders are required to provide them with a good-faith estimate of their closing costs. The fees
vary according to several factors, including the type of loan they applied for and the terms of the purchase agreement. Likewise,
some of the closing costs, especially those associated with the loan application, are actually paid in advance. Some typical buyer
closing costs include:
The down payment
Loan fees (points, application fee, credit report)
Prepaid interest
Inspection fees
Appraisal
Mortgage insurance
Hazard insurance
Title insurance
Documentary stamps on the note
Seller closing costs
Existing Mortgage Balance ( If Applicable)
Other seller closing costs can include:
Broker's commission
Transfer taxes
Documentary Stamps on the Deed
Title insurance
Property taxes (prorated)
Negotiating Closing Costs
In addition to the sales price, buyers and sellers frequently include closing costs in their negotiations. This can be for both major
and minor fees. For example, if a buyer is particularly nervous about the condition of the plumbing, the seller may agree to pay for
the house inspection.
Likewise, a buyer may want to save on up-front expenditures, and so agree to pay the seller's full asking price in return for the seller
paying all the allowable closing costs. There's no right or wrong way to negotiate closing costs; just be sure all the terms are written
down on the purchase agreement.
Prorations
At the closing, certain costs are often prorated (or distributed) between buyer and seller. The most common prorations are for
property taxes. This is because property taxes are typically paid at the end of the year for which they were assessed.
Thus, if a house is sold in June, the sellers will have lived in the house for half the year, but the bill for the taxes won't come due
until the following year! To make this situation more equitable, the taxes are prorated. In this example, the sellers will credit the
buyers for half the taxes at closing.
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