As your closing agent prepares for your closing, the title company will receive instructions from the lender and begin ordering the documents needed. Generally, these documents are the warranty deed, note, deed of trust or mortgage, release of liens, payoff figures from existing loans, proof of insurance, and the survey.

There are certain standard costs associated with closing the sale of a home. These fees are divided between the buyer and seller, as stated in the purchase agreement. Generally, closing costs are equal to approximately 3% of your loan amount.

☞ Standard Closing Costs

  • Loan origination fee
  • Points (optional)
  • Appraisal fee
  • Credit report
  • Interest payment
  • Escrow account
  • Property taxes
  • Transfer taxes and recording fees
  • Homeowner’s insurance
  • Flood insurance (optional)
  • Private mortgage insurance (PMI)
  • Title insurance (optional)

☞ Loan Estimate

Buyers receive a Loan Estimate of closing costs at the time the loan application is submitted to the lender. The Loan Estimate is a written list of the estimated closing costs connected with your mortgage transaction required by Federal law. It includes the lender’s charges and closing agent’s fees, and also the estimated property taxes and homeowner’s insurance. At closing you will receive a Closing Disclosure showing these costs as well.

☞ Alternative Sources of Funds to Close

With proof of ownership, the following are alternative solutions of acceptable assets used for a down payment and closing costs:

  • 401 K
  • Gift funds
  • Stocks/bonds and IRA
  • Sale of an asset
  • Seller contributions
  • Lender paid closing costs (higher interest rate/lower cost)
  • Second mortgages/line of credit
  • Cash value from life insurance policy
  • Homebuyer assistance programs (through city or state)
  • Loan from a family member (FHA only)