08/02/2010 Unexpected closing costs often take borrowers by surprise just days or hours before the close of a mortgage home loan deal. Some hidden costs aren't revealed until you reach the negotiation table--unless, of course, you do your homework beforehand and estimate the costs as best you can.
The most basic way to estimate closing costs is simply to ask your lender for a good faith estimate (GFE). Lenders are required to provide this document to you if you request it. A good faith estimate contains all costs and fees involved in the mortgage deal, itemized for you to review. But this is just an estimate. Costs may change before the closing date is reached depending on the type of loan such as FHA home loans vs Conventional Fixed Rate Mortgages.
Though a good faith estimate is a valuable tool to use when determining closing costs, you should try to determine what the fees and expenses will look like on your own as well. Look for the following expense items, and add them up.
o Application fee
o Origination fee
o Document preparation fee
o Appraisal fee
o Surveyor fee
o Inspection fee
o Title fee
o Property taxes
o Homeowner's insurance
o Private mortgage insurance
o Attorney fees
o Points paid
o Down payment
Depending on where you live, there may be additional fees required. Similarly, some of these costs won't apply to you. For the most part, however, the above list is fairly standard for most mortgages that close. The exact amount of each expenses will vary depending on your situation. Talk to your lender and try to determine what the closing costs of your mortgage will be before you come to the table on the day of the deal.
