Do You Know What Your Closing Costs Will Be?

It's not enough to know the interest rate of your loan. You have to know what the closing costs will be also and that can add many thousands of dollars to your total cost of ownership.


Closing Costs is a general term representing all the related miscellaneous expenses associated with closing a deal like:

• Loan application fees


• Loan origination fees


• Attorney's fees


• Transfer Taxes


• Title inspection fees


• Mortgage insurance premiums


• Survey fees


• Deed preparation and recording fees


• Prepaid interest


• etc.

But there are no fixed closing costs as such. It just depends on the deal is structured, the price of the house, etc. You can negotiate some of the closing costs (like loan application and origination fees). But some others (like mortgage insurance and taxes) cannot be negotiated.


However all closing costs must comply with the Real Estate Settlement Procedures Act (RESPA). According to RESPA, the lenders must provide you with a clear statement of the cost of the loan and the closing costs so that as a consumer you can compare alternative offerings and make an intelligent decision.


The lenders are supposed to provide you with a Good Faith Estimate of the total loan-related expenses that you'll be asked to pay at the settlement table. But if your application is turned down, then they do not need to disclose such closing cost information.