What are the Typical Closing Cost for a Mortgage on a Loan?
Melissa Gootee
What are the Typical Closing Cost for a Mortgage on a Loan?
The typical closing costs for lets say a $300,000 loan can vary depending on location, lender, and loan type.
Closing costs, on the other hand, can range from 2% to 5% of the loan amount, which translates to $6,000 to $15,000 for a $300,000 mortgage. These percentages are also depending on the consumer and loan type. We typically see the closing costs to be 3%.
Some common closing costs that a borrower may incur include:
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The origination fee is a fee charged by the lender for processing the loan, and it can range between 0.5% and 1% of the loan amount.
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Appraisal Fee: The lender will charge an appraisal fee to assess the value of the property and ensure it meets lending standards. Look back in my blogs for Inspections vs Appraisals or just click here to be redirected!
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Title search and insurance fees: These cover the costs of researching the property's title history as well as protecting the lender and borrower from any ownership or title issues that may arise.
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Escrow fees: The escrow (Title) company charges this fee to handle the transfer of funds and paperwork between the buyer, seller, and lender.
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Prepaid expenses include property taxes, homeowner's insurance, and prepaid interest, which is interest earned between the loan closing date and the first mortgage payment.
It's worth noting that some lenders will cover some or all of the closing costs in exchange for a higher interest rate or other fees. It is critical to carefully consider these options and perform the necessary calculations to determine which option is best for your specific financial situation. I'm always here to help with these kind of decisions and have great referrals for you too!
Are you thinking that now or in the near future maybe be time to buy a home? You can Contact Melissa directly or you can Download my Ultimate Buyers Guide.
If you are thinking of BUYING in today's market I would love to help you. I have great people on my TEAM that can help you learn more about mortgages and how much you can qualify for and afford.
Click the link above to find out what you qualify for or simple call Jane or Zach Johanns with New American Funding.
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