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| Closing costs |
When you buy a house there are some costs involved in addition to your downpayment. The cost of inspections will be ""out of pocket"" expenses--paid as the inspections are completed. The appraisal and credit report will be prepaid when you make loan application. And you will be required to provide a paid-up homeowner's hazard insurance policy at closing.
Costs paid at closing include recording fees, loan initiation fees and a closing fee to the title company. You must provide a lender's title insurance policy, and a mortgage insurance policy if your downpayment is less than 20% of the purchase price. You will pay interest through the end of the month and deposit two months escrow payments for real estate taxes, homeowners insurance, and mortgage insurance. Altogether, your closing costs will total 3-5% of your loan amount in addition to your downpayment.
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