Buyer’s Closing Costs

One of the things I’ll be looking for as we go over the contract is how the fees are split between you and the seller on the contract. Some of the costs pertain to the actual changing of ownership of the property and some are costs incurred in getting the loan.

We’ll go over the contract and the closing costs, and I’ll answer any questions that you may have as to which are negotiable and which costs are decreed by law to be yours.

When the loan application is made the lender will provide a Good Faith Estimate of closing costs. The estimate is just that, an estimate based on the loan officer’s experience and it may not include every cost involved. I’ll review the estimate with you and point out any missing costs or estimates I think may be low.

Typical Closing Costs in Austin Texas

Loan Origination Fee
This covers the administrative expenses in setting-up and processing the loan. The loan origination fee may be a percentage of the mortgage amount

The buyer has the option to pay points to lower the interest rate at which the loan will be repaid. Each point equals 1 percent of the mortgage amount. For example: on a $150,000 loan, 1 point would equal $1,500.

Credit Report
The lender uses a credit report to determine the creditworthiness of the loan applicant. This fee is often paid when the loan application is submitted.

Appraisal Fee
The fee for having the house appraised may be incorporated into the closing costs or payment may be required by the lender at the time the loan application is submitted.

The lender may or may not require a new survey to be obtained. This expense is usually paid by the buyer, but is negotiatble. Condos do not require surveys, but most other property types do require an acceptable survey.

Property Inspection Fees
These are typically paid outside of closing, but depending on the inspector, you may be able to include this fee in the closing. 

Interest Payment
Typically the buyer is required to pay interest on the mortgage loan to cover the time between the closing date and when the first mortgage payment period begins. For example: If closing is on May 15. Your first monthly payment begins to accrue interest on June 1 with your first mortgage payment due July 1. At closing an interest payment covering the accrual period between May 15 and May 31 may be required.

Escrow Service Fees
The title company or attorney will pass along expenses related to managing the transaction file. These expenses typically

At closing a payment may be required to fund the escrow account if the lender is paying home insurance, property taxes and/or other expenses out of the escrow account. These fees may include:
    Recording Fees
    Courier Fees
    Wire Fees
    Settlement Fee

    Title Insurance
    Private Mortgage Insurance- for some loans
    Homeowner Insurance
    Flood Insurance

    Transfer Taxes
    Property Taxes- will be pro-rated based on the date specified in the contract, usually the date of closing.

Other Expenses
     Homeowner Association Transer costs
     Homeowner’s Dues