ISouth Orange

Your Plan of Attack
Strengthen your Credit
Do your “Home’work"
Types of Homes
The Home Inspection
The Closing
Closing Costs

Marketing your Home
Pricing your Home
Telling the World
Protect your Privacy & Security
Creating Curb Appeal
Home Improvements
School and municipality info listed by county & town.



Real Estate Information for Buyers:
Closing Costs

Closing Costs
At closing, there are two categories of costs:

  1. Non-recurring closing costs—items that are paid once and you never pay again.
  2. Recurring closing costs—items you pay time and again over the course of home ownership, such as property taxes and homeowner's insurance.

Non-Recurring Closing Costs

Points - Points, or your Loan Origination Fee, is equal to one percent of the mortgage loan.
Discount Points - Any points in addition to the loan origination fee are called "discount points." On a conventional loan, discount points are usually lumped in with the loan origination fee.
Appraisal Fee - Your property is your collateral for the mortgage, so lenders want to be reasonably certain of the value and require an appraisal. Appraisal fees vary.
Credit Report - Required by your mortgage lender. Fees vary.
Lender's Inspection Fee - Required by your mortgage lender if you’re buying a new home. Fees vary.
Mortgage Broker Fee - Applies only if you work with a mortgage broker. Fees vary.
Tax Service Fee - Required by your mortgage lender. Fees vary.
Flood Certification Fee - Required by your mortgage lender. Fees vary.
Flood Monitoring - Required by your mortgage lender. Fees vary.
Other Lender Fees - Required by your mortgage lender. Fees generate income for the lenders and are used to offset the fixed costs of loan origination. Costs vary.
Document Preparation - Required by your mortgage lender. Fees vary.
Underwriting Fee - Required by your mortgage lender. Fees vary.
Administration Fee - Required by your mortgage lender. Fees vary.
Appraisal Review Fee - Sometimes required by your mortgage lender. Fees vary.
Warehousing Fee - Rarely required by your mortgage lender. Fees vary.
Items Required To Be Paid In Advance
Pre-paid Interest - Since mortgage loans are usually due on the first of each month, this fee is based on the number of days the closing takes place prior to the first of the following month.
Homeowner's Insurance - Typically, you will pay the first year in advance. fees vary.
VA Funding Fee - The Veterans Administration sometimes charges a fee for guaranteeing your loan. Fees are normally added to the balance of the loan.
Up Front Mortgage Insurance Premium (UFMIP) - This is charged on FHA purchases of single family residences (SFR's) or Planned Unit Developments (PUDs) and is 2.25% of the loan balance. Like the VA Funding Fee it is normally added to the balance of the loan.
Mortgage Insurance or PMI - Most mortgage insurance (if required) is paid monthly with your mortgage payment. PMI covers the lender and a portion of the losses in cases where borrowers default on their loans.
Reserves Deposited with Lender - The lender's goal is to always have sufficient funds to pay your bills as they come due. Here, if you make a minimum down payment, you may be required to deposit funds into an impound account to make the payments on your homeowner's insurance, property taxes, and mortgage insurance. Impound accounts are sometimes referred to as escrow accounts.
Homeowners Insurance Impounds - Since a lender is allowed to keep two months of reserves in your account, you will have to deposit two months into the impound account to start it up.
Property Tax Impounds - Here, the amount varies depending on when your closing takes place. Fees vary.
Mortgage Insurance Impounds - Most lenders ask that you may put at least one, possibly, two months worth of mortgage insurance as an initial deposit into your impound account.

Non-Recurring Closing Costs Not Associated With The Lender

Closing/Escrow/Settlement Fee - Methods and fees vary.
Title Insurance - Title Insurance costs vary depending on whether you are purchasing a home or refinancing a home. The title insurance exists to protect you from any claims that could be brought against the property you’re buying. The title insurance gives you a guarantee, that once you have bought your home you own it, or else, the title company must compensate you for damages.
Notary Fees - Loan documents have two or three forms that must be notarized. Fees vary.
Recording Fees - Certain documents get recorded with your local county recorder. Fees vary.
Pest Inspection or Termite Inspection - Typically paid by the seller of the home.
Home Inspection - Optional item.
Home Warranty - Optional item.

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