Those dreaded costs!! Many of the charges are negotiable and are based on custom and practice in an area in many instances. (imagine that!)
Here are some bullets to consider:
Make sure your lender gives you a good faith estimate as required by law. This should take place well before the closing date.Points or loan origination fees
. This is an up-front payment of the interest that you owe your lender.
. These are the fees that are charged to process all of the paperwork and keep the money in a safe place while you and the seller dicker over things. Depending on the cost of your home, this can amount to a few hundred to a couple of thousand dollars.
. You should expect to pay between $500-$2,000 depending on the value of your home and your coverage. You must get this insurance before your lender will release the funds for your house.Title insurance
. What would happen if, six months after you move into your new house, you discover that the person who sold you the house didn't really own it? Arrgh! While it's a remote possibility, it does occasionally happen. Luckily, there's protection against this very problem. Your lender will want you to get "title insurance" to take care of this situation should it arise. Based on the value of your home, expect to pay between $500-$2,000.
. Depending on when your purchase actually closes, you may owe the previous owners for taxes that they've already paid. For example, say the old owners paid their taxes from January through June. You buy the house in April. Well, they've already paid for your taxes for May and June. You need to reimburse them for this expense. In addition you may need to prepay some taxes.
. You may not need a lawyer. That is generally up to you. I would suggest having one unless you are an expert in the area.
Private mortgage insurance
. If you have a loan that requires it, count on paying at least a few month's premiums in advance. Some lenders will want you to pay for an entire year.
. Yes, someone has to swear that you are who you say you are. Expect to pay about $50 for the privilege.
Document prep fees
. Lender and/or broker fees.
. To give your home a fair market value.
Factual credit report fee
. A verified credit report.
Tax service fees
. To ensure your taxes are paid each year.
. This may be waived sometimes if an existing survey can be used.
Pest inspection fee
. If your house is new, this can be waived.
State recording fees
. As your state requires.
Finally, there may be a "catch all". Someone who shows up and says...oh by the way, we need these association fees paid for, etc...
Just be ready for potential add ons and do not be shy when asking why? and push back/negotiate as needed.