Buyer's Costs

• Down Payment - The percentage of the purchase price paid up-front and not financed by a loan.
  
  
• Loan Application Fee - Paid to the lender at the time the mortgage application is submitted.
  
  
• Home Inspection Fee - Paid to an inspector for the review of the property. The inspection is usually done within a few days of signing the purchase agreement.
  
  
• Points (or "Discount Points") - These are paid to the lender at the time of closing in order to reduce the interest rate. One point equals 1% of the original loan amount. The interest rate is generally reduced by 1/8th % for each point paid.
  
  
• Escrow Fees - Escrow fees are paid to the lender for real estate taxes, homeowner's insurance premiums for 2 or 3 months, and private mortgage insurance if applicable.
  
  
• Flood Certification Fee - Paid to the lender for verifying that the purchase complies with local flood zones.
  
  
• Document Preparation Fee - Lenders fee for processing the mortgage paperwork.
  
  
• Private Mortgage Insurance - If the down payment is less than 20% you may need to obtain private mortgage insurance.
  
  
• Home Owners (Hazard) Insurance - Must cover the total amount of the mortgage declaring the lender as the payee.
  
  
• Title Search Fee - Covers the review of the title for liens or other problems.
  
  
• Title Insurance - Protects the buyer and lender from any future title claims against the property.
  
  
• Legal Fees - Covers local and state processing fees. Also goes toward the processing of various other documents and miscellaneous fees.
  
  
• Recording Fees - State or local fee for recording the purchase transaction.
  
  
• State, County, City, and Village Real Estate Tax Stamps - Paid at the time the title is transferred from seller to buyer.

1. Buying A Home
2. The First Step
3. The Buying Process
4. Buyer's Costs