What are Closing Costs?

 

Lenders are required to give borrowers a loan estimate of their closing costs. While the loan estimate summarizes costs, we suggest getting a complete breakdown of costs on an initial fees worksheet.

When reviewing your breakdown, keep in mind that some lenders name their fees differently. For example, we have had borrowers tell us that they are being quoted a rate with no points (a point equals 1% of the loan amount) only to find out that they were being charged a 2% origination fee.

We have included a sample from an initial fees worksheet of a $229,040 FHA 30 year fixed rate mortgage in Dutchess County, New York (interest rate 4.375%, APR 4.94%):

Sample Closing Costs

Appraisal Fee:

$370

Credit Report Fee:

$45

Tax related Service Fee:

$0

Underwriting Fee:

$40

Flood Certification:

$0

Closing/Escrow Fee:

$500

Title Insurance:

$1,399

Recording Fees:

$231

State Tax:

$2265


Total:

$5350

Pre-payables: 30 days worth of interest $823.60 ($27.4534 per day)

In addition to pre-paid interest, all FHA loans require the member to establish an escrow account for their taxes and insurance. FHA upfront mortgage insurance typically can be rolled into the loan amount.