Closing Costs

Settlement costs, better known as closing costs, make up a large amount of expenses when buying a home. The closing costs may include a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs. Some costs may not apply to every person or circumstance. Your loan officer will give you a breakdown of costs in a document called a Loan Estimate or LE. The LE will include each fee that is specific to your loan. Closing costs usually make up two to six percent of the mortgage amount.

One factor that is not included in every loan is the buying of points. Points are a percent of your loan amount that is paid up front. If you purchase points, it can reduce the interest rate on your loan. You will decide in advance if you would like to purchase points but it is not required. If you choose not to purchase points, you will have a zero-point loan.

Settlement costs are paid at closing which is the meeting that legally consummates the transaction. When you are provided a Loan Estimate, you will know how much your settlement costs are in advance. Settlement costs are paid with a cashier’s check and also includes your down payment.

The experts at First Ohio Home Finance are here to simplify these difficult aspects of home buying. Contact us to get started on your home buying process today.