Understanding Your Closing Costs on your Mortgage
It is important to understand each fee that you are being charged on your loan. There should be no surprises. Nowadays so many safeguards have been added to help protect the borrower but still ultimately it is your responsibility to know what is going on. Please see my tutorial on what a typical estimate in Florida should look like.
Settlement costs
There are so many different charges involved in buying a home, it is important to know what to expect at the settlement. Your lender is required to give you a Good Faith Estimate (GFE) of your settlement costs within three business days of your loan application. Once you get it, review the charges below to avoid any surprises when you sit down to close on your loan. With the new Good Faith estimate of 2010, it is your lenders responsibility to give a proper quote of the lender fees, the title company fees and the transfer fees of the state.
TheNewGFE
HUD-1SettlementStatement
There are three basic categories of settlement costs:
Specific lender fees can include:
Title Companies and Closing Agents Play a Key Role in Providing Good Service:
Title Companies and Closing Agents are determined by the contract if you are purchasing or by the owner of the home if you are refinancing. It is important to pick a title company with a firm commitment to service.
Fees to state and local governments. These fees include transfer, recordation and property taxes collected by local and state governments. Your taxes based on the assessed value of the home, which you pay for community services such as schools, public works, and other costs of local government. Taxes can often be paid as a part of your monthly mortgage payment.
During the passed several years I have come across several bad title companies who didn't understand the true meaning of customer service. Many are spoonfed by banks selling foreclosures and have no concept of service. If you are purchasing a foreclosure, please keep this in mind. Expect fees to be higher than normal and service levels to be lower. Sometimes the poor service of a bad closing agent can delay a closing.
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