Understanding Closing Costs

With the current coronavirus pandemic, many home buyers and homeowners are taking advantage of falling mortgage rates. Whether you are buying a new home or refinancing a current one—be sure you get a good deal on any fees and closing costs associated.  This week, Professional Mortgage Solutions in Rego Park, NY is here to help you understand closing costs for new and refinance mortgages.

How to Understand What You Will Pay

To understand your closing costs, look at all the loan estimate paperwork provided by your lender. Closing fees may vary by type of mortgage and will be updated as time passes. It is always good to double-check. These fees help cover the costs of finalizing a new or refinanced mortgage. They are paid at the time the title of the property is transferred to the buyer.

Buyers will pay some of the closing costs, but so will the seller since the costs may include the real estate agent’s commission for the sale. Within three days of your application, the lender should provide you a disclosure including closing fees. The amount you will pay will depend the area in which you are buying a home.

How Much are Typical Closing Costs?

Establishing the average closing costs for your area can be done by comparing what others pay depending on the current regulations and tax policies. Some say the costs should range between 3% to 6% of the total loan or purchase price. Many people choose to pay the closing cost as a one-time fee. Some offer free quotes or calculators to help determine the fees.

If you are worried about fees, check if state and local organizations in your area provide any loans or grants to help with paying closing costs. Some lenders may even offer you the ability to pay more and buy discounts that may include lower interest rates for the loan.  You can also try to negotiate if you feel a fee is inaccurate.

What do Closing Costs Typically Cover?

Depending on the type of loan and your local policies, closing costs usually help cover property, insurance, and lender fees. Below are some examples. Feel free to work with Professional Mortgage Solutions to understand whether you are getting a good deal.

  • Many closing costs help cover home appraisals mandated by lenders.
  • Other costs cover escrow fees, which may require you to pay portions of property taxes and insurance upfront into the escrow account.
  • Fees may include loan interest, especially the prorated amounts from the closing date to the first of the following month.
  • Lenders also charge fees that cover items such as administrative costs, pulling your credit report, and wire transfer fees.

Professional Mortgage Solutions can help home buyers in Rego Park, NY manage closing costs—contact our team today with any questions or for a no-hassle quote!