How to Use the Mortgage Loan Closing Costs Calculator

What Are Closing Costs?

At closing, you'll have certain fees to pay for the privilege of buying a home or getting a mortgage. Some are customarily paid by the buyer, some by the seller, and some are split. Of course, if you're refinancing, there's no seller to split the costs of your loan with.

What Are Recurring Costs?

In addition to paying on the principal and interest every month, you'll have other fixed monthly payments. Those recurring costs include:

• Property taxes, which are paid to your local government. Depending upon where you live this can add significantly to your monthly payments. Property tax is not charged by the lender; it's just a cost of owning a home.
• Hazard insurance, which covers fire, theft, and damage. Flood insurance and other policies may be issued separately.Like property taxes, hazard insurance isn't a lender's charge, but it may be collected by the lender in your monthly payment.
• Private mortgage insurance (PMI) is required if your down payment is less than 20% of the property value or sales price.

What Are Non-Recurring Costs?

Some fees will only be paid at closing. A mortgage calculator can help you estimate these costs, but keep in mind that some of them may change by the time you close on your home. Non-recurring costs include:

• Loan origination fee to cover to costs of originating, processing, and closing on a mortgage
• Discount points, which can be used to lower the interest rate
• Recording fee to report a property sale into the public record
• Credit report fees
• Appraisal fees to determine the market value of the property
• Notary fees to make sure all the mortgage documents are prepared properly
• Title insurance, which protects you and the lender against legal defects related to the property.
• Escrow fees to third parties who hold and disburse all funds at closing.
• Document preparation fees may be charged by lenders to cover the cost of preparing loan documents.

For some people, going into a closing can be scary because of all the paperwork and confusing legal jargon on real estate documents. Other non-recurring fees that you can put into the Closing Costs Calculator include those for:

• Property inspection
• Attorney services
• Tax services
• Surveys of the property
• Homeowner association (HOA) transfer
• Miscellaneous fees for things such as couriers and underwriting.

Note: Not all the charges in this calculator may apply to you and there may be other closing cost that are associated in real estate transaction.

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