Closing Costs - What to Expect

Don't forget to factor in closing costs when considering a home sale or purchase. Robert DeYoung of EPIC Real Estate Group is seasoned at assisting both buyers and sellers when it comes to closings. E-mail or call us today at 719-359-7010 if your needs include a real estate pro ready for the business side of buying and selling.

There are certain standard costs associated with closing the sale of a house. These costs are commonly split between the buyer and seller, as noted in the sales contract. Many are customary, but there are nuances to each, so you'll want a real estate expert in Colorado to help show you through your transaction. 

Loan Related 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 Payment:

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:

At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account.

Taxes

Property Taxes:

This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the seller occupied the property.

Transfer Taxes and Recording Fees:

This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.

Other Fees

• Homeowners Insurance
• Flood or Quake Insurance (optional)
• Private Mortgage Insurance (PMI) (optional)
• Title Insurance

Sellers: As we get through the details of your deal, I'll not only work to get the very best sales price, but I'll also push for reduced closing costs. And once we've reached an agreement, I'll give a detailed list of the closing costs so you know exactly what you're paying for. 

Buyers: If you're purchasing a house in El Paso County, you will be given a "Good Faith Estimate" (GFE) of closing costs within three days of submitting your loan application. The estimate is based on the loan officer's past experiences and is required to be within a reasonable range so you're not surprised when you get to the closing appointment. I'll be happy to go through the GFE with you, answering your questions and highlighting any estimates that seem unusual.