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What You Need to Know about Your Mortgage Closing Costs
Before closing in the deal, you need to fill out some paperwork with a breakdown of all the costs of completing your Alabama mortgage transaction. You need to bring either a certified check or a personal check to you mortgage’s closing ceremony before closing the deal. It may take place in a bank, at a title company, or even on an attorney’s office. Here are the actual breakdown of your closing costs.
Commissions: these are payments for the agents that assisted you in getting your mortgage. All commissions of real estate agents or brokers are paid at the closing. Sellers are the one who usually takes care of the payment, although this may change if either the local custom orders not to, or there was a deal to split the negotiation into purchase contract and sales. However, a written agreement has to be made before this can be done.
Application Fee: Most lenders in states like Alabama usually charge a lender’s fee processing to the buyer.
Appraisal Fee: This is when a bank hires an independent appraiser to verify if the property really is worth the price that you’ve been offered.
Credit Report Fee: This fee is charged to the buyer to acquire their credit report. However, this can be free if you get it from three of the credit bureaus who offers a 30- day trial. These are Equifax, TransUnion and Experian.
Lender’s Inspection Fee: this is only charged to the buyer if you are either constructing a new house or getting a house that is still under construction.
Assumption Fee: This is only charged if the seller has an existing mortgage and the buyer will take over it.
Lender’s Attorney Fee: If in case the lender hires an attorney for a loan application.
Interest: This is the interest that has been accrued from the date that they had it completely settled to the first month of their mortgage due date.
Mortgage Insurance Premium: this is for the buyer’s home insurance and will only be charged in the first year of a homeowner’s mortgage insurance premium.
Hazard Insurance Premium: this is an optional insurance policy that will cover the lender if in case a calamity may happen.
City Property Taxes: these are charges mandated by all cities including Birmingham. You have to pay at least the two months’ worth on your closing.
Closing costs or also called as settlement costs are the fees that you have to pay to settle your mortgage application. These charges may be a lot for first-time homebuyers. That’s why it’s advisable to save an extra stash of money just to make sure you can cover all the closing costs.