Closing Costs

When purchasing or refinancing a home there are many standard closing costs associated with the transaction. Most of these fees are typically at the purchaser’s expense and of course if refinancing, are at the homeowner’s expense. The purchase and sales contract however can always be negotiated to determine who exactly will be responsible for certain costs if it will be contrary to standard practice.

Good Faith Estimate
When buying or refinancing a home you will be forwarded a “Good Faith Estimate” of closing costs within three days of submitting your application to the lender. The estimate is based on the lenders knowledge of the transaction and what fees they know will be associated with the transaction. This is an estimate and its intent is to come as close as possible to the actual cost you will see on your closing statement when you sign the actual loan documents. The Good Faith Estimate may not include all costs if the transaction requires additional fees as the analysis unfolds. Certain things may become necessary, such as a building inspection, based upon information that becomes available during the underwriting process.

Closing costs may vary significantly from lender to lender and we pride ourselves at SBSI in minimizing closing costs and assuring you a very competitive closing cost package with no surprises at closing. In fact, our closing comes with a money back guaranty if you are not happy with the process. How many lenders offer you that type of assurance? I would be glad to walk you through the closing costs, answering any questions that you may have on any good faith estimate you may have received from another lender to explain each cost, determine whether they are reasonable, and see how they compare to our costs.

Standard Closing Costs
Possible Loan-Related Costs
  • Application Fee
  • Loan Documentation Fee
  • Title Search by Attorney
  • Lender’s Title Insurance Policy (see title insurance article for details)
  • Mortgage Survey or Survey Affidavit
  • Appraisal Fee
  • Interest Rate Lock Fee
  • Credit Report Fee
  • Flood Insurance Determination Fee
  • State Transfer Tax (if a purchase and sale transaction)
  • Points or Origination Fees

Pre-paid Costs/Escrows/Taxes/Insurance
  • Pre-paid Interest
  • Initial Tax Escrow Funding
  • Initial Homeowners Insurance Escrow Funding or annual insurance payment
  • Initial Private Mortgage Insurance Escrow Funding if applicable (see PMI article)
  • Flood Insurance, if necessary

Related Links:
Loan Considerations
Should I Buy Points?
Rate Lock Options
What is PMI?
Why Title Insurance?