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Down Payment
Most lenders require at least 10% of the purchase price, though new programs are available for 3%-5% down. 100% financing can be found, but you credit must be excellant and PMI insurance will be required.
Loan Origination Fee
A lender's fee for establishing a new loan. Government regulations allow only 1% origination fee on FHA or VA loans. Conventional loan fees can vary from -1 to 3+ points, plus other costs. A point is 1% of the loan.
Appraisal Fee
Fee paid to obtain an estimate of market value upon which the lender will base the loan amount. The cost is about $300-$500. Non refundable.
Credit Report
An evaluation of the buyer's credit habits made by a credit bureau for the lender.
The cost is $50-$60. Non refundable.
Tax Service Fee
A charge of approximately $75 is made by a tax service company to verify to the lender that the taxes have actually been paid when due or are due to be paid by borrower or mortgage company if impounding.
Assumption Fee
Fee of approximately $250 up to 1% of the loan balance is charged by the existing lender for the privilege of assuming the existing loan.
Pest Inspection Fee
Fees of $75 - $175 is charged by termite companies for inspecting property for damage done by wood destroying organisms and dryrot.
It is customary for the seller to pay for Section 1 and the buyer for Section 2 work.
Other Inspection Fees
Other inspections the buyer may choose to have done are: property inspections that usually cover foundation, electrical, plumbing and overall construction at a cost of $300-$400. Roof inspections cost $75-$125. Geological reports cover subject's site in relation to fault and slide zones, costing about $100.
Septic $200-$400. Radon $50-$100. Asbestos $75-$125.
Alta Title Insurance
This is an extended policy with more specific coverage than the CLTA standard policy.
It covers unrecorded liens, is based on loan amount only and is required by almost all lenders. The cost is obtained from a rate chart and is based on the loan amount.
City Transfer Tax
A municipal tax imposed within the corporate limits of some cities.
The cost is $3.30 per $1,000 of selling price, usually negotiable between buyer and seller, but custom varies between countries.
The VA does not allow the veteran buyer to pay any portion of this cost.
Miscellaneous Costs & Fees
An estimate of $150 should be adequate to cover minor items as notary, recording documents, endorsements, etc. as well as allowing for variations from these other estimates.
Hazard Insurance Reserve
Two month's premium is collected for the impound account if required.
The buyer will need to either provide or pay for coverage for the 1st year.
Prepaid Interest
Interest must be paid from COE (close of escrow) to 30 days prior to the first regular mortgage payment. An estimate of one months interest should suffice.
Mortgage Insurance
Mortgage Insurance is required on all conventional loans greater than 80%.
The cost may range from 1/2% to 1% per year and 14 months premium is
collected in advance. This is coverage for the lender in case of default.
Tax Impounds
If the new loan is going to have an impound account, the lender will require from 2-10 months taxes to be deposited, depending on the time of year. Note: if taxes are prorated, buyer's total charge for taxes should equal about six month's taxes.
Escrow Fee
These fees range from $750-$2500, depending on the sales price. In some counties its customarily paid by the seller, in other counties the buyer pays, while in others it may be customarily split. Remember though, everything is negotiable.
Negotiating Fees
The above fees are typical costs when buying real estate in California counties.
Most of the fees are considered buyer's non-recurring closing costs.
Some of the fees are fixed while others are negotiable.
Your real estate agent can negotiate with the sellers to pay some or most of these costs, saving you thousands of dollars in closing costs.
Ask your real estate agent and loan agent to provide estimated closing costs of buying a home before looking at homes.
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