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How do Closing Costs Work?

There are certain standard costs associated with closing the sale of a house. Buyers and sellers almost always share these costs, as specified in the real estate sales contract.

Many of the costs associated with buying a house are associated with getting a mortgage loan. At American Residential Real Estate Financial, Inc., we have extensive experience in mortgage lending, so we can compile a comprehensive report on mortgage-related costs in your "Loan Estimate".

The Loan Estimate (Also known as the LE)

Buyers will receive a "Loan Estimate" of closing costs around the time the loan application is submitted to the lender. The closing costs specified in the LE are estimated based on our experience with mortgage loans, but costs usually vary a little bit between the LE and closing. We answer questions about closing costs every day at American Residential Real Estate Financial, Inc., so don't hesitate to contact us if you have questions.

Below is a generic list of costs for buying residential real estate. We will always provide you with a specific list of your closing costs when we give you a Loan Estimate.

Standard Closing Costs

Loan-Related Costs
  • Appraisal Fee
  • Credit Report
  • Up-front Interest Payment
  • Escrow Fees
  • Taxes
  • Loan-related costs
  • Points — A fee paid to lower your interest rate (optional)
Property Taxes
  • Transfer Taxes and Recording Fees
  • Insurance
Homeowners Insurance
  • Private Mortgage Insurance (PMI)
  • Title Insurance
  • Flood or Earthquake Insurance if applicable

American Residential Real Estate Financial, Inc. can help you understand closing costs. Call us: 310-534-6200.

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