You’ve chosen a home you want to buy and your offer has been accepted. You’ve also applied for and been approved for a mortgage. Now you are ready to take legal possession of the home and promise to repay your loan. At least three days before your closing, you should get your official Closing Disclosure, which is a five-page document that gives you more details about your loan, its key terms, and how much you are paying in fees and other costs to get your mortgage and buy your home. Many of the costs you pay at closing are set by the decisions you made when you were shopping for a mortgage. Charges shown under “services you can shop for” may increase at closing, but generally by no more than 10% of the costs listed on your final Loan Estimate. The Closing Disclosure breaks down your closing costs into two big categories:

YOUR LOAN COSTS

  • The lender’s Origination Costs to make or “originate” the loan, along with application fees and fees to underwrite your loan. Underwriting is the lender’s term for making sure your credit and financial information is accurate and you meet the lender’s requirements for a loan.
  • Discount points—that is, additional money you pay up front to reduce your interest rate.
  • Services you shopped for, such as your closing or settlement agent and related title costs.
  • Services your lender requires for your loan. These include appraisals and credit reports.

OTHER COSTS

  • Property taxes.
  • Homeowner’s insurance premiums. You can shop around for homeowner’s insurance from your current insurance company, or many others, until you find the combination of premium, coverage, and customer service that fits your situation. Your lender will ask you for proof you have an insurance policy on your new home.
  • Any portion of your total mortgage payment you must make before your first full payment is due.
  • Flood insurance, if required.

Get additional tips, a step-by-step checklist, and help with the rest of the documents you’ll see at closing by contacting CosmoLends at at 216.387.1003. CosmoLends are experts in home loan products including FHA, VA, Conventional, USDA and OHFA, as well as purchase rehabilitation loans such as the FHA 203(k) and HomeStyle Renovation products. Call us and speak to one of our mortgage coaches to find out how we can help. You can also speak with a member of our loan team for a FREE consultation.

Published from Your home loan toolkit – A step-by-step guide by Consumer Financial Protection Bureau