What do typical closing costs consist of? I am a first time homebuyer and don't want to be over charged.

Asked by Jahari Dickens, Santa Clarita, CA Thu Dec 18, 2008

My GFE has a loan origination fee, processing fee, underwriting fee and a funding fee- are these all the same thing? Also, is it typical to have to pay for 30 days interest upfront? What about $500 title insurance?

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Thu Nov 18, 2010
Processing, underwriting, funding, escrow, title, and recording fees are typical. The exception is the origination fee. If you want a zero point loan, typically you would have a slightly higher interest rate vs a one point cost. Escrow fee is based on your purchase price or in the case of a refinance, escrow fee is a flat fee. Title is based on your loan amount.

Your loan officer should be discussing a 1 point vs a zero point and anything in between so you understand all your options.

I have no problem reviewing your current GFE and giving you suggestions. Absolutely no obligation. Simply Fax to 661-255-3336 or email me a copy.

I can be reached at (661) 255-3335 should you need further assistance.

Cheryl Garner, Mortgage Expert
Fairview Mortgage Capital, Inc.
Email: cheryl@cherylgarner.com
Web Reference:  http://www.cherylgarner.com
0 votes
Margie Shaff…, Agent, Santa Clarita, CA
Wed Aug 26, 2009
Sounds like you went through a broker, the origination and the processing fee are usually the brokers fees and the underwriting and funding fees are usually the banks. Most lenders will disclose 30 days of interest to be paid up front, since this is the most you will pay. But depending on which day of the month it funds on, this will give you an accurate amount. So, if you close on the 1st of the month,- 30 days interest. But if you close on the last day of the month zero days interest. Interest is a fee that you will always pay up front.
0 votes
Tvandemark, , 91355
Sun Dec 21, 2008
Hi Jahari,

You will hear some say as a general rule, closing costs are 2-3% of the sales price. There are many fees and many that are not listed in your note. It also depends if you have a 2nd loan too. You can feel free and give me a call and I will be happy to give you some hard copies of information that will assist you and if you would like we can go over them together. This way you can mark it up and make it your own reference. By the way costs vary state to state, and every deal will have similar, but one may have higher processing fee and another may have a higher appraisal fee and so on. Best of luck.

Serving AV, SCV, SFV and Ventura County,
TV-Tracy Van De Mark
(661) 310-4004
0 votes
BOB Khalsa, Agent, Newhall, CA
Thu Dec 18, 2008
They are not necessarily the same: in fact some of them could be points or extra costs you incur to get the loan. These differ from lender to lender and also depend on your credit and FICO scores. Besides what you have listed there could be other items such as tax service fee, flood certification, discount points, etc. Title insurance cost is directly related to the purchase price. Those costs that have been charged and are directly connected to the loan, when applied to the "interest rate" for the loan, will give you the APR or Annual Percentage Rate. The APR gives you the true cost of the loan.

You should ask your agent to explain it to you. If you do not have an agent, your most welcome to come to my office in Newhall and we can go over all the charges in the GFE.

Bob Khalsa, CCIM
Broker Owner
United America Realty
U.A. Property Management
0 votes
M.D.J, , Los Angeles, CA
Thu Dec 18, 2008
Nope, they are all different but yet still come down to the same thing...total lender fees. They can take on different names sometimes there will be none at all but then the rate or points can be higher so for comparison purposes...total lender fees, points and rate have to be considered.

You lose nothing when it comes down to interest collected because that has to do with what day of the month you close. If you want less interest collected then that only means your first payment will be that much sooner and vise versa.

As far as Title, Escrow or other fees not related to the lender you are at the mercy of whoever controls and choices those services.

Good luck to you...
0 votes
Dana Schuster, Agent, Slidell, LA
Thu Dec 18, 2008
First,let me ask--do you have an agent? As an agent,i get quotes from 2-3 different title companies. Closing costs vary from state to state. i will never forget my first closing.The buyer(my client0 was using a funding source based in virginia where closing costs are much higher than here in louisiana.They gave him an estimate for closing costs at something like $6100. he came to me in total shock. i went back & forth ibetween 2 diffeerent title companies & was able to negotiate a bit & we ended up at something like $1175.
In Louisiana(don't know how it is in your state) the choice of title companies is entirely the buyer;s--so you probably can get quotes(or get your agent to do this) from different companies. In louisiana,title insurance is optional but I urge my buyers to purchase it--it's well worth the cost. The sellers may believe in all good faith that they are presenting you with a clear title,but down the line things can be fouled up by something as simple as a misspelled name 60 yrs. ago--long before they purchased the property Hope this helps--but someone from your state can probably give you a more specific answer.
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