Calculating Closing Costs

Closing Costs in Miami Beach

Before you even think about calculating your closing costs, there are many steps to complete first. The point in time at which the contract is actually executed and the title to the property is conveyed to the buyer is known as the closing.  The costs associated with the closing of the transaction are known as closing costs. Closing on your home-purchase deal costs money, about 3 to 5 percent of the purchase price, plus your down payment. There are a few important things to do to make sure you get the best deal on closing costs. You have the right under federal law to get an itemized list of fees at least one day prior to closing. This is provided on the HUD-1 Settlement Form. All fees that you and the seller must pay are itemized separately. Go over the list ahead of time. Read the sales contract one more time. Make a list of closing costs you agreed to pay and check it against the HUD form. Check the lender's preliminary good faith estimate against the final document. Question any changes and additional fees. Shop for title insurance. Title Insurance and the associated fees make a up a big chunk of your closing costs. Shop around to find the best price. Make sure you are getting a guaranteed quote on all associated fees and charges.

Calculating Closing Costs

There are many different closing cost for someone buying a home or condo, and it can be confusing to know exactly where you money is going. Different fees include Points and origination fees, loan application fees, title search and title insurance, appraisal fee, inspections, condo application fees, and more. It is best, for the buyer, to be aware of these fees and to incorporate them into your budget.

Points and origination fees - These are fees related to your mortgage. Discount and Origination Points are equal to a percent of the loan amount. 1.75 points is equal to 1.75% of the loan amount. Discount points represent additional money you can pay to the lender at closing. If you pay more points it will lower the interest rate. Paying points can be good only if you plan on living in the home for a long time. Origination Fees are charged by the lender for evaluating, preparing, and submitting a proposed mortgage loan.

Title search and insurance - A title search is a detailed examination of the historical records concerning a property. These records include deeds, court records, property and name indexes, and many other documents.

Loan application fees and credit report - These are included in your bank’s Good Faith Estimate. Be sure they are the same when you get to the closing table. You can actually get your HUD statement 1 day before closing so you have time to read it carefully with the help of your realtor.

Inspections - This fee is for the service of a professional inspector who visits your property and inspects it. It is particularly important if you are buying a house as the inspector can inspect the foundations.

Appraisal Fee - This fee pays for an independent appraisal of the home you want to purchase. The lender requires this estimate of the market value of the house for the loan.

Lender’s and Buyer's attorney - This fee is to review and prepare all documents necessary for closing.

Intangible tax - only for new mortgages. They are 0.2% of the loan amount.

Condominium application fee - This can range around $100.