Thursday, December 29, 2016 / by Jason Huerkamp
Earnest Money Deposit
This is the payment you make on the home as a token of good faith to the Seller, an amount that the Seller would not need to refund should you withdraw from the sale or cancel the sale
The downpayment is the amount you pay as part payment for the home and a payment to the lender in support of your application for a home
Loan Origination Fee
These are the fees associated with processing your mortgage and are lender related. There are fees for the loan, processing and underwriting of your mortgage.
Your lender will require a credit report and that fee would form part of your lender fees
Upfront Mortgage Insurance
If you are using an FHA loan or similar where you do not have a full regular 20% downpayment, you may be required to pay the Mortgage Insurance which is an added amount. Check the estimated figures with you Lender
Daily Interest on Mortgage
Daily Interest payable on pro-rated mortgage fees through the end of month of closing in lieu of mortgage payment for the month of closing
When purchasing a home your real estate agent will recommend that you get a home inspection done on the property. This fee is paid for by the Purchaser of the property.
Depending on the date of closing, you would need to budget for the Property taxes, which are the fees paid to the county for property taxes and are pro-rated and you would need to pay your share at time of closing
The lender will require that you pay for an appraisal on the property to be sure that their investment is priced correctly and accordingly. The lender sends out an appraiser to evaluate the property and for that service you are charged a fee.
This may often be paid for by the Seller as it absolves a certain amount of liability for him, but occasionally this is paid for by the Buyer
Attorneys/Title Fees and Closing Fees
The attorneys fees and closing fees are payable by the Purchaser. The Purchaser gets to nominate the attorney.
Title Search Fees
This fee would be for the Attorney to check and be sure that there are no liens registered against the property title. This would form part of the Attorney fees.
Home Owners Insurance
The Purchaser would pay for home owners insurance and this would normally be a pre-requisite of the Lender giving you a mortgage on the property, to ensure that their investment in you is safe.
If a property is located within a flood zone, lenders may require flood certification insurance to protect their investment.
Home Owners Association Fees
The Purchaser would be responsible for the HOA fees and they are usually paid monthly in advance and you would probably need to budget for that at the time of closing.
Always choose a responsible and experienced real estate agent and lender. They have many options to assist you to get the best deal and be guided by their expertise. Get a quote ahead of time so that there are no surprises when it comes to closing. A great real estate agent will make sure you are aware of the costs of purchase prior to closing.
Considering Buying a Home? Read 8 Important Steps When Buying a Home