| Closing costs have become a hot topic of discussion | | | | 6. Escrow: If this has been agreed upon in the initial |
| in the real estate business circles. Lot of people | | | | stages itself, an amount is set aside for escrow |
| actually consider this part of the deal a very | | | | account to take care of expenses that might be |
| troublesome and avoidable factor, even though it is | | | | common in nature as well as for certain issues like |
| unavoidable. During finalizing stages, there is a good | | | | home warranty or taxes. |
| faith estimate that is produced by the agent and | | | | 7. Title inspection fees: These are for the real estate |
| these are supposed to contain all costs. With every | | | | agent who has cross checked the title deed for |
| real estate transaction there are recurring and | | | | verification. |
| non-recurring costs. Recurring costs are those that | | | | 8. Real estate agent fees: This fee is for the agent |
| you will pay many times over the years, like | | | | who has helped you through out the deal, starting |
| homeowners insurance, property taxes and | | | | from marketing to finalization. |
| mortgage installments. Items that are paid only once | | | | If you are opting for a mortgage, there are a few |
| are considered non-recurring. Closing costs are | | | | additional closing costs associated with the closing. |
| non-recurring but you need to budget for these as | | | | These may include the following: |
| they sometimes work out to almost three to five | | | | 1. Loan application fees. |
| percent of the purchase amount. | | | | 2. Loan inspection fees. |
| The different closing costs that you can expect to | | | | 3. Loan administrator fees. |
| bear at the closing of a purchase, in case of a cash | | | | 4. Under writer fees. |
| deal are: | | | | It is always advisable to get in contact with a tax |
| 1. Appraisal fees: These are fees to be paid to the | | | | consultant as a prelude to the closing stage. There |
| appraiser who is part of the bank and does an | | | | are a lot of expenses that are tax free and hence it |
| appraisal of the home. | | | | is advisable to make sure that these expenses are |
| 2. Inspection fees: These are to be paid to the | | | | part of closing costs top avail of the corresponding |
| individual who does an inspection. | | | | tax benefits. |
| 3. Attorney fees: Attorney who has helped you | | | | Some agents or lenders come up with plans that |
| finalize the deal has to be paid. | | | | they claim can cut closing costs. Research these plans |
| 4. Termite inspection: If the bank requires this to be | | | | very thoroughly as these most often cut costs by |
| carried out. | | | | masking them under a different name and also by |
| 5. Homeowners insurance: This is critical as | | | | increasing their rates, which makes the final payment |
| non-payment can lead to a multitude of problems. | | | | even more expensive. |