How to Estimate Closing Costs

All those charges, fees and miscellaneous costs sure add up quickly. If you remember the details, you'll have a good idea of what to expect at closing.

Difficulty: Moderate

Instructions

Things You'll Need:

• Calculators
• Escrow / Title Company
• Real Estate Attorneys
• Calculators

1. Add up fees for loan processing, document preparation, tax service (to make sure the taxes are paid during the loan), flood service (to make sure the property is not in a flood zone), loan underwriting and wire fees (the cost of wiring money).

2. Include fees for courier service, notary fees, appraisal, credit report and inspection fees.

3. Add in the cost of title insurance and escrow fees based on the purchase price and loan amount. (Call a title company to get this information.)

4. Remember property taxes. Depending on when the transaction closes, you may have to pay part or all of an installment.

5. Include homeowner's insurance - also known as hazard insurance - for a year.

6. Add in loan fees or points paid to the lender. (A point equals 1 percent of the loan amount.)

Tips & Warnings

• By law, lenders are required to give you a written estimate of closing costs within 3 days of accepting your loan application.
• Depending on the state in which you live, a real estate attorney or a title/escrow company will be involved in the transaction.
• Closing costs run anywhere from $2,500 to $5,000 per transaction for an average home.

[smc61]

on 10/29/2008 In regard to Who Can Help with Closing Cost and Tips & Warnings I have a good suggestion for making sure you get the closing costs you were quoted. Being in the mortgage business for the last 15 yrs I can tell you that you still have a couple of options to make sure that you were not unfairly overcharged. Your first course of action should be to get a solid comparison between the Good Faith Estimate and the HUD-1. One very helpful site is Closingcostfax.com. The site is run by software that compares the Good Faith Estimate to the HUD1 in a matter of seconds and provides you with a side by side comparison to any changes that took place from the original Good Faith Estimate to the HUD-1. Once you have the comparison in hand send it to the originator and ask for a detailed explanation for any cost that changed or were added to the HUD-1. Many States now have laws in place to prevent severa