All residential real estate sales incurs costs. Sellers and buyers almost always split these costs, as the sales contract specifies.
Many of the costs associated with buying a house are associated with getting a loan. At Primary Residential Mortgage, Inc., we are highly experienced in residential mortgage lending, so we can compile a comprehensive report on mortgage-related costs in your "Good Faith Estimate".
Good Faith Estimates (GFEs)
Very soon after you apply for a loan, we will give you a "Good Faith Estimate" of your costs. The closing costs specified in the GFE are estimated based on Primary Residential Mortgage, Inc.'s experience with mortgage loans, but costs often change a little bit between the GFE and closing. We review GFEs with buyers almost every day, so we will be happy to answer the you have about closing costs.
Below is a fairly general list of costs for buying residential real estate. We will always provide a specific list of your closing costs when we give you a Good Faith Estimate.
Standard Closing Costs
Loan-Related Costs
- Interest Payment
- Escrow Fees
- Taxes
- Loan-related costs
- Points — These are costs you pay up-front to lower your mortgage interest rate (optional)
- Appraisal Fee
- Getting YourCredit Report
Property Taxes
- Insurance
- Recording Fees & Transfer Taxes
Homeowners Insurance
- Title Insurance
- Flood / Earthquake Insurance if applicable
- Private Mortgage Insurance (PMI)
Shopping for a mortgage? Primary Residential Mortgage, Inc. can help you to understand closing costs. We'd be thrilled to talk about your mortgage needs! Give us a call at (209) 47007161 or complete the form below.
Loan-Related Closing Costs
Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount.
Points (optional)
An option for the home buyer is to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.
Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.
Credit Report
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.
Interest Proration
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.
Escrow Account
Some loan programs (i.e. FHA & VA) require an Escrow Account bet set up for the future payments of Property Taxes & Home Owners Insurance. The lender/loans servicer maintains this account and pays the taxes and insurance when they come due. With other loan programs, escrow accounts are optional.
These escrow accounts are also referred to as "impound" accounts.
Title and Escrow Fees
In California, Title Companies function as escrow holders, as well as issuers of Title Insurance. There will fees for these and other services, such as recording necessary documents, notarizing signatures on required documents, courier services, etc.