Understanding the Fees Associated with Your House Closing

When it comes to purchasing a home, the process of completing all of the necessary paperwork and paying all of the required fees can feel a bit overwhelming at times. In order to help reduce your anxiety and to help the closing process go more smoothly, it is beneficial to have a greater understanding of what is involved in the process and the fees you will be expected to pay at your closing.

Appraisal Fee

An appraiser will estimate the fair market value of the home before your deal can be finalized. Lenders require an appraisal to be completed because they want to ensure they are making a good investment when they approve your loan. In other words, if you default on your loan, the lender wants to be relatively certain the money can be recovered by reselling the home.

Property Survey Fee

To ensure you know precisely where the boundaries of the property are located, you may need to have a professional survey your lot. The cost of this service will be dependent upon the complexity of the job.

Loan Origination Fee

The lender will charge a fee for processing your loan. This fee is usually calculated as a percentage of your loan amount.

Escrow Fees and Accounts

Most lenders will require you to set up an escrow account to which you make a monthly payment to help cover the cost of property taxes and insurance. The third party that manages the account will then ensure these costs are paid on time and in full. You may also be charged a small fee for this service.

Attorney’s Fees

An attorney may be brought on board to develop the closing documents, in which case you will have to pay for the attorney’s services. These fees may be a flat cost or they may be calculated as a percentage of the loan.

Recording Fee

The transaction between you and the seller must be recorded with your county, city or other government branch. This fee covers the administrative costs associated with this process.

State and Local Transfer Taxes

You may also be required to pay certain taxes related to the transfer of the property. The amount of these taxes will depend upon the local tax laws of where the property is located as well as the value of the property and the amount of the loan.

Loan Discount Point

If you chose to purchase points in order to reduce your interest rate, you will need to pay for these points at closing. Keep in mind that points are tax deductible if you pay them separately and do not have them deducted from the loan.

Whether or not you are responsible for paying all of these fees depends upon the agreement that you have made with the seller. As part of your offer on the house, you may have negotiated that the seller is responsible for all or a portion of these fees.

The many small fees associated with closing on a house can add up quickly. Therefore, if you are fully responsible for paying the closing cost on your new home, you need to be mentally prepared to spend thousands of dollars toward these costs.

To learn more about closing costs and your options, contact our team of experienced real estate experts today. We’d love to help you secure the perfect Fort Worth home.

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