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Just so you know, each state's requirements may be slightly different and you might not have to pay every fee listed below, but this article should prepare you for what you could find on that sheet. Plus, we've based everything off of the actual sheet you'll be presented – the HUD-1 form – so that you won't be surprised by anything at the tail end of the process.

Commission – This is the total dollar amount of the real estate broker's sales commission, which is usually paid by the seller. This commission is typically a percentage of the selling price of the home. This division of this sum (or lack of) will be written into the sales and purchase contract.

Items Payable in Connection with Loan – These are the fees that lenders charge to process, approve and make the mortgage loan:

• Loan Origination Fee: This fee is also called a "point" or "points." One point equals 1% of the loan. It covers the lender's administrative costs in processing the loan. Often expressed as a percentage of the loan, the fee will vary among lenders.
  Closing Cost Responsibility - Buyer
  
  
• Loan Discount: Also often called "points" or "discount points," this form of pre-paid interest is a one-time charge imposed by the lender to reduce the interest rate at which it would otherwise offer the loan to you. Each "point" is equal to one percent of the mortgage amount. The more the points up front, the lower the interest rate. For example, if a lender charges two points on a $80,000 loan this amounts to a charge of $1,600.
  Closing Cost Responsibility - Buyer
  
  
• Appraisal Fee: Almost always the responsibility of the buyer, this charge pays for an independent appraiser to determine whether the property is worth the sales price you've offered for it. Most lenders require that an appraisal be performed as a condition of the mortgage loan.
  Usual Closing Cost Responsibility - Buyer
  
  
• Credit Report Fee: This fee covers the cost of a credit report, which shows your credit history. The lender uses the information in a credit report to help decide whether or not to approve your loan and how much money to lend you
  Closing Cost Responsibility - Buyer
  
  
• Lender's Inspection Fee: This charge covers lender-required inspections of a newly-built home or one that is under construction.
  Closing Cost Responsibility - Buyer
  
  
• Mortgage Insurance Application Fee: When your down payment is less than 20 percent of the purchase price, you are required to carry Private Mortgage Insurance (PMI), to protect the lender should you default on your loan. This fee, paid by the borrower, covers the processing of the application for PMI.
  Closing Cost Responsibility - Buyer
  
  
• Assumption Fee: Sometimes a buyer will take over or "assume" a seller's mortgage. This fee covers the costs incurred in doing so.
  Usual Closing Cost Responsibility - Buyer
  
  
• Mortgage Broker Fee: This fee compensates the broker(s) for their services involved in all aspects of selling the property. Brokerage commissions are usually computed as a percentage of the sale price, and are established in a listing agreement between the seller and the listing broker. This is often one of the largest closing costs.
  Closing Cost Responsibility - Seller
  
  
• Home Warranty: An available warranty insures major household systems against repair or replacement for a pre-determined timeframe – generally, the first year of ownership.
  Usual Closing Cost Responsibility – Buyer and/or Seller

Items Required by Lender to Be Paid in Advance – You may be required to prepay certain items at the time of settlement, such as accrued interest and hazard insurance premiums, as well as funds to set up your escrow account.

• Pro-Rated Interest: Lenders usually require borrowers to pay the interest that accrues from the date of closing to the first monthly payment due date.
  Closing Cost Responsibility - Buyer
  
  
• Mortgage Insurance Premium: The lender may require you to pay your first year's mortgage insurance premium or a lump sum premium that covers the life of the loan, in advance, up front.
  Closing Cost Responsibility - Buyer
  
  
• Hazard/Homeowner's Insurance Premium: Lenders often require the buyer to pre-pay their insurance policy premium for the upcoming year. Hazard (better known as homeowner's) insurance protects you and the lender against loss due to fire, wind and natural disasters.
  Closing Cost Responsibility - Buyer
  
  
• Flood Insurance Premium: If the home lies in a floodplain, the lender may require flood insurance and the buyer to pay this policy's premium right off the bat.
  Closing Cost Responsibility - Buyer
  
  
• Earthquake Insurance Premium: Depending on the property location, it is possible the lender will require earthquake insurance and the buyer to pay the policy's premium up front.
  Closing Cost Responsibility - Buyer
  
  
• Pro-Rated Homeowner Association Dues: If the property is covered by a Homeowner Association (HOA), the buyer will be assessed a pro-rated charge so that each owner pays their proportional share of the yearly dues.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Pro-Rated Property Taxes: Since all but a tiny fraction of real estate transactions close on a date other than the one(s) when the taxes are due, most transactions must include an adjustment to assure that both the seller and the buyer end up paying their share of the annual property tax, proportionate to the percentage of the year that each has ownership of the property.
  Closing Cost Responsibility - Buyer

Title Charges – Title charges may cover a variety of services performed by title companies and others. Your closing may not include all of the items below or may include others not listed.

• Settlement or Closing Fee: This fee is paid to the settlement agent or escrow holder. Responsibility for payment of this fee should be negotiated between the seller and the buyer.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Abstract of Title Search, Title Examination, Title Insurance Binder Fees: These charges cover the costs of the title search and examination, which ensure that there aren't any unpaid mortgages or liens on the home.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Document Preparation: Some lenders or title companies charge this fee to cover their costs of preparation of final legal papers, such as a mortgage, deed of trust, note or deed.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Notary Fee: This fee, charged to the buyer, covers the cost of having a licensed notary public testify that the persons named in the documents did, in fact, sign them.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Attorney's Fees: You may be required to pay for legal services provided to the lender. Occasionally, the seller will agree to pay part of this fee. The cost of your attorney and/or the seller's attorney may also appear here.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Title Insurance: Paid for by the purchaser, title insurance protects the buyer by guaranteeing the title to the property is clear.
  Closing Cost Responsibility – Buyer

Government Recording and Transfer Charges: These fees may be paid by you or by the seller, depending upon your agreement of sale with the seller.

• Record Of Deed and Mortgage: The buyer usually pays the fees for legally recording the new deed and mortgage.
  Usual Closing Cost Responsibility – Buyer
  
  
• Transfer Taxes: These taxes, paid by either or both parties depending on locale, can be quite large and are set by state and/or local governments. City, county and/or state tax stamps may have to be purchased as well.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Recording Fees: Paid by either party, this governmental fee covers the cost to enter the deed in the official record as a change of ownership of the property.
  Usual Closing Cost Responsibility – Buyer and/or Seller

Additional Closing Costs:

• Survey Fee: This pays for a survey of the lot or land and all structures on it to confirm lot size and dimensions, and check for encroachments.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Pest and Other Inspections: Depending on location, this fee covers inspections for termites or other pest infestation of your home.
  Usual Closing Cost Responsibility – Seller
  
  
• Lead-Based Paint Inspections: This charge covers inspections or evaluations for lead-based paint hazard risk assessments.
  Usual Closing Cost Responsibility – Buyer
  
  
• Radon Test: The responsibility for this cost can lie with either the buyer or seller. The test covers the cost of testing for the presence of radon gas, which can be a problem in some parts of the country.
  Usual Closing Cost Responsibility – Buyer and/or Seller
  
  
• Courier Fee: This can appear as a closing cost if a courier picks up and delivers your settlement documents.
  Usual Closing Cost Responsibility – Buyer

If something doesn't quite make sense or if you have further questions, just give us a ring at 1-800-734-REFI. With plenty of expert knowledge and experience, we'd love to help out in any way we can.