What are closing costs?
If you have been looking to purchase a home, you’ve probably heard the phrase ‘closing costs’, but do you really understand what that means? Simply put, closing costs are the costs associated with purchasing a home. Some come from the lender and some from the title company. Here are a few of the common closing costs. Origination Fee – the fee the lender and mortgage broker, if one, charge the borrower for making the loan. Appraisal Fee – lenders want to know a property is worth what a borrower is going to pay so an appraisal will be done as part of the process. Credit Report Fee – lenders will check the credit history of borrowers. The bank is charged a fee for this, which they then collect from the borrower. Lender’s Title Insurance – costs of the lender’s title insurance policy. This policy protects the lender’s investment. Recording Fees – these fees are paid to the county for recording of any deeds, mortgages, satisfactions of mortgage, etc. related to the purchase.Transfer tax fee – in Wisconsin, this fee is collected when a property is sold.
These are only some of the fees that may be listed on your closing disclosure. If you have questions about any fees on your closing disclosure, definitely ask your lender or closing agent.