When you are looking for a loan, the important thing to understand is that some companies will get you with their closing costs. In other words, certain lenders will advertise super low rates but in reality they are making up the difference in their closing costs.
A good tool to look at is your Good Faith Estimate. This document is part of a package that all lenders are required to send to potential clients, after they have filled out a basic mortgage application. The GFE will have a close estimate to what the final closing costs (cash-to-close) would consist of, and where they are all coming from. So that piece of paper would tell you exactly what you are paying for.
My company, PrimeLending, does not attempt to make any additonal profit off of our closing costs. We only charge for some of the fees that we were required to pay for (credit reporting fee, flood certification fee), as well as other unavoidable costs like taxes, prepaid insurance, etc. We understand that it is better to keep the required cash-to-close low, and we end up getting more business for it.
If you have any more questions, or would like to inquire about a mortgage, please feel free to contact me any time!
Cody Broshar, Loan Originator
50 East 91st St, Suite 300
Indianapolis, IN 46240
Title work, Closing, Appraisal, State/Local fees and recording, origination, processing, underwriting, credit report, fraud detection services, flood cert., etc.
Many programs require homeowners insurance paid for the next 12 mos (if you escrow your taxes and insurance) and if you're building, you'll likely need 12 mos taxes too.
If you see less in closing costs, generally speaking they've given you a lender credit which means basically you have a slightly higher rate and payment to cover the costs. Some programs offer lower payments but higher closing costs, it is a trade off. It is important to find a loan advisor with access to ALL loan programs available and advise you based on your goals/needs.
Talk to your local Realtor. They are the best resource for helping you through the process.
Generally closing costs include title insurance, prepaid interest, documentation prep, discount points, closing fees and more. It is not unusual to see 3% requested for these items. On a $150k house, I usually write $2500 or so n for closing costs if I represent the buyer. http://Www.homesaleindy.com
However closing costs can and will vary based on the lender you select , if the sale is a cash or mortgage, if a mortgage the type of mortgage loan and amount of down payment and even if the property is a home or condominium can impact costs.
Feel free to check out http://cityhomesandlifestyle.com/closing-costs-what-are-they to learn more about the different potential closing costs as well as what you can do to lower closing costs.