If you are interested in buying a home or are currently in the process of a home purchase, you have probably already considered the variety of costs associated with this transaction, such as the down payment and mortgage fees, but there is one more cost homebuyers should be aware of; closing costs. Closing costs consist of the additional fees of buying a new home or refinancing an existing loan that are not included in the down payment or mortgage fees. The loan specialists at Foundation Mortgage can help you understand the costs associated with closing on your home and help you determine the best financing option for your situation. We serve clients in Knoxville, Maryville, Lenoir City, Oak Ridge, and Gatlinburg, Tennessee, contact us today to better understand closing costs.
What Are Closing Costs?
Whether you are buying a new home, or refinancing a current mortgage, closing costs are the fees that are associated with finalizing your mortgage. Closing costs are paid at the closing of the deal, when the title of the home is transferred to the buyer. Closing costs typically are two to five percent of the loan principal amount, but the price varies depending on the price of the home, the current housing market, and on the area you are located in. The homebuyer is responsible for paying for a majority of closing costs, but the seller usually pays for a few of the costs. In some instances, closing costs can even be included in the financing of the home purchase. Foundation Mortgage can work with you to help determine the amount of closing costs you will likely be responsible for paying and try to find the best financing option to meet your needs.
What Are the Fees Associated With Closing Costs?
In a home purchase or refinance, there are a wide range of fees that are associated with closing costs, including:
- Application fee – the fee a lender charges to process your mortgage application
- Credit report fee – the fee the lender charges to obtain a credit report and check your credit score
- Loan origination fee – this includes the fee associated with processing and underwriting the loan
- Appraisal fee – includes the cost of the home appraisal and survey associated with determining the market value of your home
- Title search and insurance fees – the title search fee ensures there aren’t any issues with ownership or liens against the property, and title insurance fees protect the borrower against errors in the property title
- Taxes – when the title passes from the seller to the buyer, you will owe taxes on the transfer of the home, and you will also be responsible for property taxes
Getting Help With Closing Costs
If you are looking to gain a better understanding of the factors associated with closing on a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage is here to help. Contact us today to discuss your closing cost and home financing questions.