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Real Estate Terminology: Defining Closing Costs

Closing costs include all of the fees and costs associated with completing the sale or purchase of a home using a mortgage, that are in addition to the actual cost of the property itself. These costs are due at the “close” of the deal, with the disbursal of loan monies, transfer of deed and completion of other final paperwork and are included on your HUD-1 settlement statement. Some of these costs go to the lender and some to third-party participants. Since many different costs may be included at closing, we’ll separate these out for you.

What costs are included at closing?

Although costs can very by state or locality, in general they can include:

Lowering Closing Costs:

Some lenders offer a no-closing cost mortgage. When you get a no-closing cost loan, however, those fees still have to be paid, so may be hidden in higher interest rates or higher loan amounts than the cost of the home. VA loans require the seller to pay a portion of the closing costs, so if you qualify for a VA loan, you can reduce some of the fees you pay. A highly motivated seller may offer to pay some or all of the closing costs to get the home sold more quickly. We can help you determine if the seller is motivated and willing, so talk to us about adding that option to your sales contract.

Contact us today at 858.333.8188.

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