Closing Costs

Closing Costs are upfront fees, expenses and prorated costs that the borrower is responsible for on a home purchase or refinance. Who pays for these costs can be negotiated with the seller, through your real estate broker, at the time you are negotiating the purchase price. Some costs can be negotiated with the mortgage broker at the time of the loan application or any time before the loan documents have been drawn. The closing costs are usually divided into 2 subcategories. They are Nonrecurring Costs and Recurring Costs.

Nonrecurring Costs
Nonrecurring costs are one-time upfront costs that will not occur again. The most common nonrecurring costs are points, escrow fees, title charges, lender fees, appraisal fee, and miscellaneous costs. Nonrecurring costs, for a purchase transaction, run from a low of $3,500 to a high of $5,000 plus points, which are optional. For a refinance, they run from $2,500 to a high of $3,500 plus points ($2,800 is average). If a borrower wishes to eliminate these "Out of Pocket" costs, take a moment to look at the "Refinance Rolldown" or No "Out of Pocket" Cost loan.

Recurring Costs
Recurring costs are upfront costs that occur at closing but will, also, occur in the future. The most common recurring costs are prorated interest, prorated property taxes, fire or hazard insurance premiums, impound account setup, mortgage insurance, and homeowners association dues. Although these costs are upfront costs, they are basically costs of maintaining the property or the loan. Recurring costs can be as little as $1000 to as high as $4000.00. It depends on the above items and the borrower's choices.

For a comprehensive review of the nonrecurring or the recurring costs, please select the corresponding link of interest.

Nonrecurring Costs            Recurring Costs

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