You’ve found the Santa Cruz home you want to buy, and now you’re ready to finalize your mortgage. But the multitude of closing costs associated with the mortgage is confusing. To help you navigate the mortgage world, here are descriptions of many of the charges you may incur when obtaining a mortgage to purchase your home:
• Recording fees for the deed: This pays the county clerk to record the deed and mortgage and change the property tax billing.
• Other state and local fees: This can include mortgage taxes levied by the state as well as other local fees.
• Pro-rated taxes: Taxes for schools and municipalities.
• Title search costs: Usually your attorney or title company will arrange for the title search to make sure there are no obstacles to you owning the home.
• Homeowner’s insurance: Most lenders require that you prepay the first year’s premium.
• Owner’s title insurance: Saves you in the event of title problems down the road.
• Land survey: Most lenders require that the property be surveyed to make sure no neighbor has encroached on the property.
Finance and Lender Charges
• Origination or application fees: These are to process the mortgage application.
• Credit report: Most lenders require a credit report on you and your spouse or equity partner.
• Points: A point is equal to 1% of the amount of the loan.
• Lender’s attorney fees: Lenders may have their attorneys draw up documents, check that the title is clear and represent them at closing.
• Document preparation fees: This covers the cost of creating all that paperwork you are signing.
• Preparation of amortization schedule: Some lenders will prepare this for fixed rate mortgages.
• Appraisals: Lenders need to make sure the property is worth the amount of the mortgage.
• Lender’s mortgage insurance: This covers the loan amount if you default on the loan. The lender gets their money back.
• Lender’s title insurance: This covers any title issues or problems that come up after the paperwork is signed and covers the lender.
• Inspections required by lender: For FHA or VA loans, the lender requires a termite inspection.
• Prepaid interest: The interest starts as soon as you purchase the Santa Cruz home, however your first payment is not due for approximately six to eight weeks. This covers the interest up to your first payment.
• Inspections: This covers any inspections required as part of the contract.
• Appraisal fees: This covers your fees if you hire an independent appraiser.
If you have questions about mortgage fees, buying a Santa Cruz home or the real estate market, please call me at 831.662.6522 and let’s talk.
For additional real estate or mortgage information, please visit my homepage at www.MySantaCruzRealEstate.com.