What are Closing Costs?
Posted: November 11, 2009
I know most of us out there may not be clear on what may fall into the category of "closing Costs" associated with a Real Estate transaction. I was just working with a customer the other day on a purchase of a new single family home the other day, and he had no clue as to what fees this closing costs cover. Below is an outline of what can be expected when purchasing a home in Lee or Collier County Florida(Naples, Bonita Springs, Fort Myers, Estero, etc.)
What Constitutes Closing Costs?
 Closing costs are expenses that cover fees associated with the transfer of property ownership, fees paid to state and local governments, and the costs of obtaining a mortgage loan. Some of these fees are negotiable, and could be paid by either the buyer or the seller. Some costs are one-time fees (non-recurring closing costs, such as title search, termite inspection, appraisal, etc.); while other fees such as homeowner's insurance or property taxes are things you will expect to continue to pay on a regular basis as a homeowner.
As part of the loan selection process, your mortgage consultant should be giving you some idea of how much money you should have in reserve to cover your end of these costs. The Real Estate Settlement Procedures Act (RESPA) requires the lender to provide you with a Good Faith Estimate within three days of the submission of your loan application.
RESPA also states that as a home buyer, you have the legal right to request a copy of the HUD-1 Settlement Statement 24 hours before your closing is scheduled. The HUD-1 clearly defines all closing costs, including those that are to be paid by the buyer and the seller. It's a good idea to have both of these forms before your closing so you can compare the estimated costs to the actual costs before you finalize your transaction
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