Closing Costs
Many first-time home buyers are astonished by the variety and size of the
fees that show up on their statement at closing time. You definitely will
need to set aside more money than you’ll need for the down payment alone.
You also will want to compare fees when shopping for a mortgage. These fees
can include:
- an application fee;
- a commitment fee;
- a loan origination fee;
- a loan processing fee;
- an appraisal fee;
- a recording fee; and
- pre-paid expenses.
These fees are often lumped together under the term closing costs. And they
vary according to your credit score. High closing costs are perhaps the worst
side-effect of having poor credit. They can add thousands of dollars to the
cost of buying a house.
You may be able to include the closing costs in your loan. This reduces your
out-of-pocket costs up front, but it increases your monthly mortgage payment.
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