First of all what are closing costs? Closing costs are the fees paid to third parties that helped facilitate the sale of the home. You can estimate that the closing costs will typically total two to seven percent of the home purchase price.
If you are the buyer, these costs will be disclosed on your Loan Estimate when you apply for your financing:
- A loan origination fee, which lenders charge for processing paperwork for your loan.
- A fee for running your credit report.
- A fee for the underwriter, who assesses your credit worthiness.
- A fee for the appraisal of the home you hope to own to make sure its value matches the size of the loan you want.
- A fee for the home inspection, which checks the home for potential problems from cracks in the foundation to a leaky roof.
- A fee for a title search to unearth any liens on the property that could interfere with your ownership of it.
- A survey fee if it’s a single-family home or townhome.
- Recording fees paid to the register of deeds to record your mortgage.
If you are the seller, here are some costs you might incur:
- Title insurance charges.
- Taxes on the home sale.
- A fee for an attorney, if the home seller has one.
- A fee for transferring the title to the new owner.
- Real estate agent’s commission, which amount to six to seven percent of the home’s sales price.
To estimate your closing costs, ask your Wisconsin Mortgage Corporation Loan Officer for an accurate estimate. Then at least three days before closing, your lender is required by federal law to send buyers a closing disclosure that outlines those costs once again. Meanwhile sellers will be receiving similar documents from their sales associate outlining their own costs. Before you go to your closing, make sure to review the documents to make sure everything lines up. A home is a big purchase item; it doesn’t hurt to double check or ask questions!