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Closing Costs

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Closing Costs HOW WILL I KNOW WHAT FEES AND OBTAINING FINANCIAL ASSISTANCE CLOSING COSTS WILL BE CHARGED? Some home buyers may qualify for A mortgage lender is required by down payment assistance programs that RESPA* to provide a Good Faith are offered through the city, county, or Estimate of settlement service charges a charitable organization. These programs that a home buyer will likely incur at may offer assistance with closing costs. the time of closing. Contact your mortgage lender or the VA Regional Loan Center for a list of The listing of reserve deposits and VA-approved programs available in prepaid hazard insurance are not your area. CLOSING COSTS required on a Good Faith Estimate so it is important to keep these amounts Common Fees & Charges in mind prior to settlement. ADDITIONAL CLOSING COSTS AND for At the closing of a home purchase, you FEES VA Guaranteed Home Loan will be asked to sign a Final Settlement Purchases Statement, also known as a HUD-1, This pamphlet is not intended to be an all which will list all the closing costs and inclusive list of fees and charges on every fees charged to you as the buyer. loan, but rather a guide to the major costs of obtaining a home loan. With the exception of the VA Funding Fee, all WHAT FEES CAN THE SELLER PAY? closing costs must be paid at closing and may not be financed into your loan. All parties may negotiate who pays which fees. A seller may offer to pay a portion of Interest Rate Reduction Refinancing Loans or all of the closing fees for the buyer. (IRRRLs), are another exception. All closing There are certain closing costs and fees fees on an IRRRL may be rolled into your new Department of Veterans Affairs that are customary for a buyer or seller to loan. VA Regional Loan Center pay. For example, on a VA Loan it is 3333 North Central Avenue customary for the seller to pay for a termite If you have any questions concerning fees and Phoenix, AZ 85012 inspection. charges on a VA loan, contact the VA Regional Loan Center. RLC Website www.vba.va.gov/ro/phoenixlgy/index.htm *RESPA or Real Estate Settlement Procedures Act of 1974 is a Federal Statute which protects Toll-free number consumers in a real estate transaction. 1-888-869-0194 Monday through Friday 7:30 a.m. to 4:00 p.m. MST April 2008 ALLOWABLE CLOSING COSTS & 3. CREDIT REPORT 6. VA FUNDING FEE FEES FOR THE VETERAN HOME BUYER This fee varies but is generally between This fee is established by VA to help offset $50 to $65. You can expect most the cost of the Loan Guaranty program. lenders to collect this fee as soon as The fee charged varies depending on the 1. LOAN ORIGINATION FEE you apply. This fee is non-refundable amount and type of loan being financed. even if the loan never closes. This is the only fee that may be added to This fee is charged by mortgage lenders the loan amount or paid in cash at closing. at closing to cover administrative costs Additional fees may apply for for processing your loan. This fee is supplemental credit reports used to If you receive VA compensation or have usually 1% of your loan amount. update your credit history. been rated eligible to receive VA For example, if your loan is $150,000 compensation you may be exempt from the origination fee will be $1,500. paying this fee. Your lender can verify this 4. APPRAISAL FEE by submitting a Verification of VA Benefits The lender may charge this flat fee or form to our office. You may also provide itemize the following fees not to exceed Currently, the average VA appraisal fee your lender with a copy of your VA 1%: is an average of $400 - $450 for a single disability compensation letter, if it family residence. The appraisal is a is dated within the past twelve months. - Application and Processing Fees statement of the property value and - Document Preparation Fee determines the maximum loan amount - Loan Closing or Settlement Fee to be obtained without a down payment. 7. TITLE INSURANCE - Notary Fees You can expect to pay this fee at the time - Interest Rate Lock-In Fee the appraisal is completed. This fee is A title insurance policy is issued by a title - Tax Service Fee non-refundable even if the loan never company after a title search is completed - Delivery/Wire Fees closes. and they have verified there are no - Commitment or Marketing Fees outstanding liens against the property. - Trustee’s Fees or Charges The fee averages from $600 to $800 but 5. HAZARD INSURANCE AND REAL may be higher based on regional ESTATE TAXES insurance rates and your loan amount. 2. LOAN DISCOUNT POINTS At closing, the lender collects advanced Discount points are charged if you want payments on hazard (homeowners) insurance 8. RECORDING FEE to get an interest rate lower than the and real estate taxes. This is necessary to current mortgage market rate. Up to two ensure there will be sufficient funds reserved This is charged for the recording of your discounts points or 2% is considered to to pay the first year of taxes and insurance deed on county records. The typical fee be a reasonable charge. Discount points when billed. These are commonly referred to averages from $20 to $75 may be paid by either the buyer or seller. as the Tax and Insurance Impound or Escrow Accounts. .
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