When you secure a mortgage, there are additional fees that should be considered. When you apply for a mortgage, the lender wants you to have 1.5% of the purchase price set aside for closing costs. In reality, the closing costs don’t really fluctuate with the price of the home. They do however vary according to the type of mortgage or property. Below are some traditional closing costs, you can see that the price of the loan doesn’t affect the fees.
Closing Cost Estimator
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What do these things mean?
Here’s a quick breakdown of the numbers above:
- Loan Amount The total amount of the mortgage
- Appraisal The cost of a home appraisal. This is not always required.
- Title Insurance This now replaces a survey certificate in most cases. It is used to formally establish the boundaries of the property and to ensure that all buildings are within those boundaries.If you have a survey certificate (which costs more) you won't need this
- Conveyance Fee This is a fancy way of saying legal fees. You must use a lawyer to complete a purchase transaction
- Inspection Fee This is the cost of a home inspection should it be required.
- Other Fees This is just a catch all that you can use to include any other fees that may be associated with securing your financing
Keep in mind that these calculators will give you some rough numbers. The numbers generated are pretty good, but keep in mind that they don’t factor in everything, so please only consider them a guide. Try to be as accurate as possible when estimating your costs.