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What are Mortgage Loan Closing Costs? Shopper's Guide

Closing costs are the fees and charges associated with finalizing a mortgage loan.


These costs can vary depending on several factors, including the location and size of the property, the type of loan, and the lender. Learn the lingo and the costs associated with home loans.


What are Mortgage Loan Closing Costs? Shopper's Guide

The most common closing costs associated with mortgages:


  • Appraisal fee: The fee paid to the appraiser for determining the value of the property.

  • Title fees: Title fees include charges associated with conducting a title search, title insurance, and other title-related expenses.

  • Origination fee: A fee charged by the lender for processing and underwriting the loan.

  • Discount points: An optional fee paid upfront to reduce the interest rate on the loan.

  • Recording fee: The fee paid to the government for recording the new mortgage and deed with the county or city.

  • Prepaid items: Prepaid items include charges for things like property taxes, homeowner's insurance, and mortgage interest.

  • Homeowner association fees: If the property is part of a homeowner association, the borrower may need to pay fees to join or transfer ownership.

  • Survey fee: The fee paid to a surveyor to verify the property boundaries.

  • Pest inspection fee: A fee paid for a pest inspection to ensure the property is free of pests.

  • Attorney fees: If an attorney is involved in the transaction, their fees may be included in the closing costs.


It's important to note that not all of these fees may be applicable to every mortgage transaction. The total amount of closing costs can also vary widely depending on the size of the loan, the location of the property, and other factors.

It's important to review the closing disclosure carefully and ask the lender questions about any fees that are unclear.


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