Ok, so you know you need a big chunk of cash to pay the lender for a down payment on that house you want to buy. You may even know about the earnest money deposit; that smaller chunk of money that you deposit once your offer is accepted. And, sure, somewhere along the line the words “closing costs” have been mentioned but when you see the amount necessary to close the loan, printed in black and white, it’s a whole other story for many homebuyers.
What are closing costs?
When you pay your closing costs you’re basically paying for all of the services you received from the bank and title company during the purchase of your Bowie Estate Home. The seller, pays closing costs as well, such as for the real estate broker’s services. In fact, who pays for what at closing varies widely across the country but some items are standard. Some of the more common fees that buyers pay include:
- A fee for pulling your credit report
- Down payment
- Escrow impounds (money kept in escrow to pay for your homeowners insurance and property taxes)
- Loan origination fee
- Notary fees
- Origination fee (this is the lender’s fee for granting you the loan)
- Points, or loan discount fees, if you’ve decided to purchase them to lower your interest rate
- Prepaid interest
- Private mortgage insurance premium
- Recording the deed
- Title insurance
Closing Costs in Bowie Estate, San Mateo and the County of San Mateo
In addition to the list above, The City of San Mateo has a city transfer tax that’s paid through escrow. The fee is $5 per thousand dollars paid for the house. The standard is for the seller and the buyer to split that cost. If the sale price of the house is $1 million, the city transfer tax will be $5,000.
The County of San Mateo charges a transfer tax as well. That fee is typically paid by the home seller and is $1.10 per thousand dollars paid for the house.
Lender disclosure requirements when it comes to closing costs
By law, lenders must disclose an estimate of loan costs within three days of the submission of a completed loan application. Then, three days before closing, the lender supplies the borrower with a Closing Disclosure. While the fees listed on the Loan Estimate may increase or decrease before closing, the Closing Disclosure is the final word.
It’s important to compare the two documents and look for changes. If you have any questions or concerns, call the lender immediately.
How to pay less at closing
In some markets, a seller may be amenable to paying the buyer’s closing costs for your Bowie Estate home purchase, or at least part of them. Talk with your agent and loan officer about your options.
If you’re purchasing a home using the Veteran’s Administration (VA) mortgage, there are certain closing costs that you are not allowed to pay. Some of these include:
- Tax Service
Plus, there is no cap on how much of the closing costs a seller is allowed to pay. So, whether the seller pays them or the lender offers a credit to help pay for them, this is yet another money-saving feature of the VA loan.
The Consumer Financial Protection Bureau’s website has lots of helpful information about the closing process, including a copy of the Closing Disclosure Form and an explanation of how to compare it to the estimate, and a closing checklist.
Bowie Estate San Mateo Homes For Sale
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