The lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashiers check. The title company or other entity conducting the closing will tell you the required amount for:
- Down payment
- Loan origination fees
- Points, or loan discount fees, you pay to receive a lower interest rate
- Appraisal fee
- Credit report
- Private mortgage insurance premium
- Insurance escrow for homeowners insurance, if being paid as part of the mortgage
- Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
- Deed recording fees
- Title insurance policy premiums
- Inspection fees—building inspection, termites, etc.
- Notary fees
- Prorations for your share of costs, such as utility bills and property taxes
Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright 2005. All rights reserved. www.REALTOR.org/realtormag.