Mortgage Closing Costs

Closing on a mortgage is not an inexpensive or simple process, but having an understanding of the costs associated with closing can save you money. Americans spend over $110 billion dollars on mortgage closing costs and in many cases, we have overpaid. Although paying padded mortgage fees is common, you can reduce the amount of fees you pay by becoming an educated consumer.

Typical Fees and Expenses

Generally, home mortgage closing costs are about 3% to 6% of the propertys sale price, but they vary by state. These costs range from approximately $2,101 to $3,907 nationally with an average cost of $2,748. Mortgage closing fees are numerous and include four general groups: title transfer related fees, taxes and other governmental fees, lender fees, and broker fees.

The Good Faith Estimate

A lender is required to give you a Good Faith Estimate on the anticipated mortgage closing costs on your loan within 3 business days following application submission. Final mortgage closing costs are typically incurred 30 to 60 days after this estimate is given and many times, they are higher than the original estimate.

Keeping with the Good Faith

The best way to save money on home mortgage closing fees is to have the seller cover them for you, but oftentimes this does not happen. Another great way to save is to shop around and obtain at least three estimates before choosing the company to handle your home mortgage.

After you have made your decision on a home mortgage lender request receipts from any outside companies the lender uses and know the correct price of all governmental fees. This will reduce the chances that your bill will be padded and help you get the best deal on your mortgage closing costs.