![]() ![]() There’s a lot of work that the title company does. It’s paying the title company to do the work. The escrow or settlement fee is the cost to do the labor. And they are really all going to add up to, in cases such as this one, about $1800 to $1,900. These are going to be things you’re going to see in this section. On the estimate, you’ll also see doc prep fees, endorsement fees, a lender’s policy fee and either an escrow fee or settlement fee. If ever you were to call us (60) and ask what the fees were they would come straight from the title company. Now, it’s important for people to know that we don’t control who the title company is. The CPL is something that all banks have asked title companies to provide. ![]() This stands for closing protection letter. You’re also going to see something called a CPL. These are very typical for what you’re going to see. Here the fees are around $25 for the tax certification fee and an additional $64 for other tax-related services fees. They also note down everything regarding your taxes. This fee covers the work the bank needs to do is verify that the tax information on your home is accurately documented and whether it’s been paid or not. This is to guarantee that your taxes are paid for every home. The fee is to cover the work that goes into figuring out whether it’s needed or not. The banks need to verify whether or not it’s needed. If we didn’t have that fee you’d be forced to have the insurance. The purpose of this fee is to certify that you either do or don’t have flood insurance. In other cases, they might be $15 to $20. The flood certification fee in this example is $11. Now, we don’t make a dime off these credit reports and we wish they were free, but, unfortunately, there is a small fee for these. The credit bureaus (Equifax, Experian, and TransUnion) have been raising the rates every year. Unfortunately, getting your credit in this context is not free. Generally speaking, these fees are going to be between $40 and $60 nowadays. In the example we’re working with, the fee here is $48. You may want to know what that home is appraising for. That being said, you might not want to exercise your right to get that waiver. If you put enough money down and you have good enough credit, they’ll sometimes give you a waiver, which is really nice. ![]() Now, for the average appraisal, there are what we call appraisal waivers. It should be noted, though, that VA appraisals are usually a tiny bit more, closer to $600. But, in this case, the appraiser wants to get paid before going out. There are no other fees that you’re paying upfront. This is a very straightforward fee, and it’s actually the only fee that typically you are prepaying. In this example, it’s $535, and in most cases, it is going to be between $500 and $550. It’s very standard to have an underwriting fee of about a thousand dollars. And if they’re not included in the loan as a closing cost, they’re being buried into your interest rate. ![]() Underwriting fees are part of every loan. The first one that shows up is the underwriting fee. Let’s break down the $3,563 in closing costs. You have closing costs and then you have cash-to-close. This extra $1,400 of other costs aren’t closing costs, rather they’re prepaid taxes and insurance, also known as the impound or escrow account. Now, if you’re looking at the loan estimate, at the bottom, you’ll see this big number of $4,963. The total closing costs in this scenario are actually $3,563. You can follow along in the video to see us going through this live, but the loan estimate scenario we are going to be looking at is for a sales price of $370,000 with 20% down. What makes up the numbers that go into the closing costs? Be sure to check that episode out as well. To put this into perspective, the refinance closing costs we had in our last podcast costs were about $2,500. Closing costs are usually going to be between $3000 and $3800. If someone asks us as, say, we’re headed to a meeting, what the closing costs are on a loan, we’ll typically throw out $3500. The difference for closing costs between a $200,000 loan and a $500,000 loan might only be about $800. The same amount of work is generally going into it. There’s not much of an extra cost to do a $200,000 loan than a $500,000 loan. They’ll say something like, “Yeah, closing costs are 1% of the sales price.” Now that is a very classic, back of napkin technique, but the problem is, closing costs are not really a percentage. I think a lot of people will think that closing costs are a percentage. Closing Costs are about the work that goes into closing the loan. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |