If you get a house loan from a bank you will have to pay closing cost. The amount of closing cost depends on how much you are financing through the bank. Closing cost is 3 percent of the price financed. If you are buying a $100,000 house, then your closing cost will be about three thousand dollars. That is the amount to be paid out of pocket along with your down payment. The reason closing costs are so high is because of all the fees involved with it. There are 15 fees involved with closing cost. The fees are generally as follows; attorney fees, title service fee, recording fees, document fees, survey fees, brokerage commission fees (seller cost), mortgage application fees, points fee, appraisal fees, inspection fees, home warranties fees, prepaid property insurance, pro – rated property tax, pro – rated homeowner association dues, and pro – rated interested. Those are a lot fees that they sure don’t tell you about before buying a house.

What do all these fees mean exactly is the question a lot people ask themselves? Attorney fees are to pay the lawyer to prepare and record all official documents. The title service fee is to cover the title search that must be done before buying your house. Recording fees are for the change of ownership of the property from the seller’s name to the buyer’s name. Document fee is charged by a governmental entity for a tax that is required by law. A survey fee is for the property to be surveyed to check the dimensions of the lot size. Brokerage Commission fee (seller cost) is just a fancy way of saying a fee to pay the Realtor who helped you find the house you are buying. Brokerage Commission is usually about 6 percent of the price paid for the house. Mortgage application fees are what you have to pay the mortgage company for help to get you the loan to buy your house.

A points fee is not always in there, as it’s something the bank offers you to lower your interest rate. You can buy points to make your interest rate lower. This will only benefit you if you plan to stay in that house for longer than 5 years. Appraisal fee is also what is says, you must have the house appraised before buying the house. If the value is less then what the buyer and seller has agreed for the prices, the seller has no choice, but to go down on their price. A mortgage company will not finance a house for more than the house value. Inspection fees are for the house to be inspected for major problems and pest. Home warranties are offered to the buyer in case a major expense happens, this warranty will help pay for it. For example, if the oven breaks the warranty will help pay to fix or replace the oven. This is an optional fee. Prepaid property insurance is determined by the date of the purchase of the house. If the house is bought in April, you will only pay for the remaining months. This is so you don’t pay for months that you didn’t own the house. Pro – rated property tax works the same as prepaid property insurance. This is so you don’t pay for months that you didn’t own the house. The same goes for pro – rated homeowner’s association dues and pro – rated interest.

These are a lot of the fees that the buyer must pay for. There is a lot of work that goes into a house loan. Many people just don’t see how much work goes into obtaining a home loan. Everybody must be paid, so as the buyer, you must pay as well.

Author Bio: Denver CO Real Estate Denver Homes for Sale

Category: Real Estate
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