CHARLOTTE, N.C., April 17, 2006 – Closing day on a new house typically brings a bag of mixed emotions: along with the excitement of owning a new home, there is also the anxiety of unexpected closing costs such as origination fees, title insurance and attorney charges.
In order to fully understand the costs that make up a real estate closing, you need to know what is involved to begin with. On closing day, the buyer and the seller sign papers officially sealing the deal, thus handing over the keys to your new home. In order for the transaction to be official, documentation needs to be in order and signed. Simply put, each of the documents gathered for your closing transaction costs money to create, prepare and deliver and your lender will charge you for these costs.
Closing costs include loan origination fees, points (if applicable), appraisal fees, title search and insurance, surveys, taxes, deed recording fees, credit report charge and other costs assessed at settlement. All together, these costs usually add up to between two percent and six percent of the total mortgage amount. Because all real estate closings will vary in cost, be sure to read the documentation carefully and ask your lender questions about each cost associated with the transaction.
As a part its ongoing mission to empower borrowers, LendingTree President Anthony Hsieh offers the following tips to ensure a smoother closing.
- Ask for and review the Good Faith Estimate (or a “GFE”) that your lender should provide at the beginning of the process. Don’t understand a fee? Ask about it. You may be able to negotiate fees that the lender controls, such as application, origination, processing and underwriting fees.
- Many people take a higher interest rate in exchange for zero closing costs, but paying closing costs can save you money over the life of the loan. Do the math, taking into consideration how long you expect to be in your house. If you have the cash for closing costs, a lower interest rate will probably save you money.
- You may be able to negotiate fees that the lender controls, such as application, origination, processing and underwriting fees. Review your GFE and ask your lender – you could be surprised.
- Carefully review the costs for third-party services, such as attorney fees, for the title search and document preparation, since lenders sometimes mark these up.
For additional information on closing costs, please visit the LendingTree Smart Borrower Center.
About LendingTree, LLC
LendingTree®, LLC is the nation's leading online lending exchange, providing a marketplace that connects consumers with multiple lenders that compete for their business. Since inception, LendingTree has facilitated more than 16 million loan requests and $109 billion in closed loan transactions. LendingTree provides access to mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans, and credit cards via www.lendingtree.com 800-555-TREE.
Founded in 1998 and headquartered in Charlotte, North Carolina, LendingTree, LLC is part of IAC Financial Services and Real Estate, an operating business of IAC/InterActiveCorp (NASDAQ: IACI), which also owns or operates LendingTree Loans, LendingTree Settlement Services, LLC®, GetSmart Lending® , RealEstate.com, Domania, and iNest.