An alarming number of first time homebuyers are unaware that mortgages involve closing costs, and which often creates a financial obstacle. Here, we\u2019ll explain not only what closing costs are, but more importantly, how to avoid paying them!<\/p>\n
Closing costs are additional fees a homebuyer is responsible for, outside of the down payment, at the time of closing. They include things like lender fees, title fees, government fees, and prepaid items such as property taxes and homeowner\u2019s insurance. See below for a more conclusive list of closing costs you may encounter.<\/p>\n
Lender Fees<\/strong> Closing costs vary based on factors such as loan amount, location (state and locality) of the property, and lender fees. Total closing costs typically range between 3-6 percent of the sale price. As stated above, not all fees apply in every loan situation. For instance, here in Michigan, title insurance and transfer taxes are typically paid by the seller.<\/p>\n Ask your buyer\u2019s agent about what (if any) fees their brokerage charges for their services, as their administrative fees can range up to $500. Lender fees can also have a large impact on a homebuyer\u2019s total closing costs. Here at Riverbank Finance, we don\u2019t charge any additional lender fees for most loan programs! Be sure to ask your loan officer what fees you can expect to pay for their services.<\/p>\n There are several ways in which homebuyers can avoid paying closing costs. The most common way to do this is to request seller paid closing costs when writing an initial offer on a property. Each loan program is different, but allows for a percent of the purchase price to be given back– up to 3% on Conventional<\/a>, 4% on VA<\/a>, and 6% on FHA<\/a> and USDA<\/a>. For example, if you are purchasing a $200,000 home with a VA mortgage, you can request seller paid closing costs of up to $8,000.<\/p>\n Homebuyers should also speak with their loan officers about no-closing cost loan programs. By utilizing lender credits, buyers can reduce or even eliminate their closing costs altogether\u2014ask your loan officer if you qualify for lender paid closing costs! Here at Riverbank we charge NO APPLICATION FEES and most of our loan programs have NO LENDER FEES.<\/p>\n To apply for a Mortgage or Refinance with NO closing costs, call Riverbank Finance today at 1-800-555-2098. <\/p>
\n\u2022 Credit Report Fee
\n\u2022 Application Fee (if applicable)
\n\u2022 Origination Fees (if applicable)
\nAppraisal Fee<\/strong>
\n Flood Certification Fee<\/strong>
\n Title Fees<\/strong>
\n\u2022 Chain of Title
\n\u2022 Owner\u2019s Title Insurance (typically paid by the seller in Michigan)
\n\u2022 Lender\u2019s Title Insurance
\n\u2022 Closing Fee
\n\u2022 Courier Fee
\nGovernment Fees<\/strong>
\n\u2022 Recording Fees
\n\u2022 Transfer Tax (typically paid by the seller in Michigan)
\nReal Estate Broker Fees <\/strong>(if applicable)
\nPrepaid Items<\/strong>
\n\u2022 Per Diem Interest
\n\u2022 Property Taxes
\n\u2022 Homeowner\u2019s Insurance
\n\u2022 Tax Prorations (to reimburse the seller for taxes they already paid)<\/p>\nRelated: Transfer Tax Calculator<\/a> and Title Insurance Calculator<\/a><\/h4>\n
How Much are Closing Costs?<\/h3>\n
Can I Avoid Paying Closing Costs?<\/h3>\n
Get More Information<\/h2>\n
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