Ever Wondered About... Closing Costs??

Especially for a first time home buyer, but also for a repeat home buyer, it may be difficult to estimate all of the costs involved in purchasing a property. Below I have itemized all of the approximate costs involved in closing a home for your reference.

Note that it usually costs you nothing to use a realtor when buying, except that if you don't, you might unknowingly overpay or miss some necessary details and paperwork.

Also, before getting scared away by the length of this list, keep in mind that this is an extremely detailed breakdown and many of these charges are VERY MINIMAL, some under $100. Add these to a mortgage financed over the span of 30 years and the additional burden is hardly noticeable.

- Loan Application Fee is paid to the mortgage company for the appraisal and credit report $350-550

- Final Inspection and Recertification of Value $75-$100

- Points may be paid to the lender at closing in order to "buy down" your interest rate

- Private Mortgage Insurance (PMI) is required when the loan is greater than 80% of the home's value. It runs about 0.52% of the loan amount annually, or higher if the loan is over 90%.

- Prepaid Interest - you pay interest on the mortgage from the date of closing through the end of the month

- Underwriting Fee is charged by the lender $250-$400

- Processing Fee is paid to the mortgage broker to process the loan $150-$200

- Document Preparation Fee is the cost to prepare the closing documents $200-$250

- Tax Service Fee is charged by the lender to obtain tax bills and monitor payment of taxes $60-98

- Flood Certification Fee is charged by the lender to determine if the property lies in an area at risk for flooding $25-$30

- Lender's Title Insurance Policy insures your lender's interest in the property is a first mortgage $150-$400

- Settlement & Escrow Closing Fee is paid to the title company to act as a lender's agent in handling the closing $100-$350

- Transfer Taxes vary by local ordinance but are $7.50 per $1000 of purchase price in Chicago

- Escrow/Reserves vary by month of closing

- Tax Reserve Fund, if required by the lender, will be a couple months worth of taxes put into escrow

- Attorney Fee varies by attorney $400-700 total or an hourly rate

- Recording Charges to record the mortgage and assign a mortgage and deed or release $60-$130

- Property Inspection is optional (but usually recommended) $250-$500

- Lead Based Paint Inspection is optional $200-$350

- Homeowner's Insurance varies by location and property

- Service Release Premium is compensation paid by the lender to a mortgage broker 1%-1.5% of loan amount

FHA/VA Loans may also include:

-Commitment Fee charged by the lender to lock the rate and points $250

-Mortgage Insurance Premium paid to HUD to insure mortgage against default. A one-time premium is required on all single-family and 2-4 units of 2.25% of loan at closing. Annual premium is .5%, paid monthly on all property types.

- Origination Fee charged by the lender 1% of loan amount