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Editor’s Note: This is a guest post from SVB of The Digerati Life a well known site that covers diverse topics on personal finance, from low interest credit cards to savings account options.
Calculating the closing costs for your mortgage might appear as a time-consuming and difficult task. Luckily, there are various outstanding online resources that you can use to calculate mortgage closing costs. If you can use these resources properly, the process to calculate mortgage closing costs would truly become simpler than you think.
One of the most confusing features of home buying is getting your finances ready for the closing costs. Though the costs might differ from one loan product to another, you can use a mortgage closing costs calculator to figure out an approximate amount of the extra costs payable while buying or selling a home.
Closing Costs of A Mortgage
Closing costs of a loan can range between 2% and 7% of the total loan amount. Luckily, all closing costs are not to be borne by the home buyer. The conditions of who would pay which closing cost would be settled between the buyer and seller. This has to be done before closing.
Usually, closing costs might include the following:
– Title service costs- Attorney fees- Documentation fees- Transaction stamps or taxes- Recording fees- Mortgage application fees- Brokerage commission- Appraisal fees- Points- Prepaid property insurance- Home warranties- Pro-rata Homeowner Association dues- Pro-rata property taxes- Pro-rata interest- Survey fee- Inspection fees
The buyer typically has the obligation to pay the following closing costs:- Point reduction fee- Loan origination fee- Credit report fee- Appraisal fee- Mortgage insurance application fee- Inspection fee- Miscellaneous title fees- Assumption fee- Documentation feeBeyond just shopping for the best home loan rates, you need to look at the underlying closing costs of your loan. If you’re the seller, you might have to pay some of the closing costs. However, your most important closing costs would be the commission to the real estate agent. Commission fees usually range between 3% and 6% but can be higher or less and this is dependent on the agreement made at the time of listing the property with the realtor. Document fees and taxes would also be incorporated in the seller’s part of the closing cost but it shouldn’t add up to an amount which is almost equal to the commission.
Closing cost calculators
There is a variety of user-friendly closing cost calculators available on the Internet. Some of the calculators are interactive calculators that necessitate that you know the purchase price or a ballpark figure and the amount that you plan to pay as down payment. Besides closing cost calculators, there are other online mortgage calculators that help you make different calculations on your loan. Using one of these tools is an excellent means to budget your money more competently. Simply keep in mind that irrespective of which calculator you select, you would get an approximate figure. Local and state taxes and various other fees related to your purchase might modify the closing cost amount. The Digerati Life is a site that covers diverse topics on personal finance, from low interest credit cards to savings account options. Check out the site’s review of the Chase Freedom credit card for a sampling.You can subscribe to her feed here