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Closing Costs

Closing costs include a loan origination fee, points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge and other costs assessed at settlement. The closing costs usually are about 2 percent to 6 percent of the mortgage amount.

Expenses required for a real estate purchase or refinance. Closing costs are also called settlement costs and can include lender charges, title insurance, escrow fees, real estate commissions, recording fees, transfer taxes and others. In real estate sales, who pays what is often dictated by local custom. In a mortgage refinance, costs may be paid by the lender or borrower.

There is another set of charges that are expenses associated with home ownership, not a home mortgage. These are prepaid items like property tax installments, homeowners insurance and other charges like HOA dues and flood insurance if applicable.

Closing costs are listed on the Good Faith Estimate (GFE) provided by the lender within three business days of a mortgage application. They should match the costs itemized on the final settlement statement, the HUD-1 form. If a mortgage lender’s charges exceed the estimated charges by more than allowed by law, the lender has to refund the excess to the borrower.