How do Closing Costs Work?
"Closing Costs" are the fees that cover the various services involved in the sale of residential real estate. Sellers and buyers almost always negotiate the payment of these closing costs.
As you'll see below, many of the closing costs result from getting your mortgage loan. Since American Residential Real Estate Financial, Inc. has extensive experience with closings and mortgages, we can help you understand your closing costs.
Good Faith Estimates (GFEs)
Very soon after you apply for a loan, we'll give you the "Good Faith Estimate" of your costs. We base this closing cost estimate on our extensive past experience. It's important to note that while our GFEs are very precise, we cannot always predict closing costs to the penny. We go over Good Faith Estimates with buyers almost every day, so we'd be glad to answer your questions about closing costs.
Below is a fairly general list of closing costs. We will provide you with a specific list of your closing costs when we provide your Good Faith Estimate.
Standard Closing CostsLoan-Related Costs
- Interest Payment
- Escrow Account
- Loan-related costs
- Points — These are costs you pay up-front to lower your interest rate (optional)
- Appraisal Fee
- Pulling YourCredit Report
- Transfer Taxes and Recording Fees
- Private Mortgage Insurance (PMI)
- Title Insurance
- Flood / Earthquake Insurance if applicable