There are fees that must be paid to the lender, along with optional ones, such as mortgage discount points, and fees that must be paid to third parties, such as title/escrow and insurance.
Whether you pay these fees out-of-pocket is another question, but either way there will be a cost, and you must pay it in one way or another.
Two Types of Closing Costs
There are two main types of closing costs, including “recurring closing costs” and “non-recurring closing costs.”
Recurring closing costs are those that will be charged more than once, whereas non-recurring costs are charged just once.
Here are some examples of recurring closing costs (paid more than once):
- Homeowner’s insurance
- Mortgage insurance
- Flood insurance
- Property taxes
- HOA dues
*Note that not all fees are necessarily applicable depending on the property, location, loan type, etc.
Here are some examples of non-recurring closing costs (one-time fees):
- Lender fees (underwriting, processing)
- Loan origination fee
- Mortgage discount points
- Credit report fee
- Appraisal fee
- Home inspection fee
- Termite inspection fee
- Building record fees
- Title and escrow fees
- Doc prep fees
- Recording and wire fees
- Notary and messenger fees
- Transfer taxes
As you can see, there are quite a few costs associated with obtaining a mortgage, and not everyone has the cash on hand to pay for all these fees.
If you want to reduce your closing costs, there are number of strategies to do so and you should call The Doug Haldeman Mortgage Team today to start your loan process and see where you can save today and for your future!
Doug Haldeman NMLS# 298419
Cherry Creek Mortgage NMLS# 3001
13321 N Outer 40 Rd Suite 500
Chesterfield, MO 63017