José September 25, 2008 Real Estate , Financing Views: 175 View Comments Print this post Send this post Copyright Jose Ramirez

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Closing costs are expenses incurred by a bank to originate a mortgage loan. The closing costs are paid at closing or signing of the deeds. Closing costs are usually 3-6% of the amount of the mortgage.

Items included in closing costs

Closing costs include costs for loan application, credit report, survey and title insurance, property appraisal, attorney fees, inspections, costs of registration of deeds, notary stamps, origination and discount. Also in many loans require an escrow account for taxes, association fees, and insurance. The latter are called prepaid and are payable in advance at closing.

You can negotiate some of the expenses included in closing costs. Things like credit report, appraisal, title research and notary fees Normally this cost the same in all banks. Some items such as origination, discount and interest are part of the offer that the bank has negotiated with its wholesalers, who buy packages of mortgages but still, it never hurts to compare different offers mortgage financing.

Good Faith Estimate

To compare deals requires a good faith estimate. The detailed estimated closing costs associated with the mortgage you are applying. The bank is required by law to solicit proveértelo once offers information on mortgage financing. May thereby compare different estimates of several banks and if you find substantial differences between them may be due to excessive rates must rise to negotiate before a loan.

Report payment at closing or "settlement"

At closing, the cost of a mortgage are broken down into HUD 1 Settlement Form. This form developed by the Federal Department of Housing is standard for the entire mortgage transaction that is secured by the U.S. government. It is divided into sections (700-1300) for the various expenses:

• Section 700 Committees
• Section 800 Loan Costs: Origination, Discount, Pricing, Credit Report, Inspection, Application Security ...
• Section 900 Prepaid: interest, mortgage insurance premium, hazard insurance, flood insurance ...
• Section 1000 Reserves
• Section 1100 Closing Costs: Closing Costs, Study title, document preparation, notary fees, title insurance ...
• Section 1200 Registration Fee and Registration: Registration and registration of the deed, Stamps ...
• Other Section 1300: Inspection, Measurements ...
• Sec 1400 Total Expenses

For a detailed discussion of the items can go to the HUD website.

Closing costs charged to the buyer

Soon, expenses of the Loan, Prepaid, Expenses Inspection, Appraisal. Insurance, Fees, Stamps and registration fees hipotca.

Closing costs charged to the seller

Commissions, Contributions and unpaid assessments, fees, deed stamps and cancellation and mortgage.

Costs negotiable between seller and buyer

Closing costs can be negotiated between buyer and seller. Nothing prevents the seller is paying the home inspection, appraisal or any rule elsewhere charged to the buyer. It can also be the buyer who pays all the legal costs associated with the sale and not the seller as usual. Beyond the sales price, buyer and seller can negotiate the closing costs.