Colorado Springs Vintage Homes Blog
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What are closing costs?
Closing cost explanation
For a free Buyers Guide, Email Kathy Torline at KTorline@msn.com
When buying real estate in Colorado Springs, the closing is the last step. It is the process of passing ownership of property from seller to buyer. As a buyer, you should be familiar with these costs that are both mortgage-related and government imposed. Here are some common fees:
Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the 
beginning of your loan application process.
Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.
Loan Origination Fee: This fee covers the lender’s loan-processing costs. The fee is typically one percent of the total mortgage, but varies from lender to lender.
Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.
Prepaid Interest Fee: This fee covers the interest payment from the date you purchases the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.
Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance.
Recording Fees and transfer taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property.
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Keep in mind that you can negotiate these costs with the seller during the offering stage. In some instances, the seller might even agree to pay a portion of all of the settlement costs.
If you enjoyed reading this article, why not Kathy (719-287-1049) KTorline@msn.com
