How do Closing Costs Work?

Certain standard costs are related to closing the sale of a house. Buyers customarily incur these closing costs, as the sales contract specifies, however, depending on the contract the seller will have to cover some of the closing costs. "Closing Costs" are the fees that pay for the various services involved in the sale of a home. These fees might be paid out of pocket or indirectly by crediting the loan.

Many of the costs associated with buying a home are associated with getting the loan. At Pro-Active Mortgage, we have extensive experience in residential mortgage lending, so we can compile a comprehensive list of mortgage-related costs in your estimate.

The Loan Estimate

Buyers will receive a Loan Estimate three days from when the loan application is submitted to the lender. The Loan Estimate details information like estimated interest rates, payments and fees, closing costs and more. Getting an estimate doesn't mean you've been approved, rather it's the first step toward securing your loan.

We field buyers' questions about closing costs every day at Pro-Active Mortgage, so please be sure to ask if we can help answer your questions.

We've provided a general list of closing costs below, but we'll give you a specific list of closing costs, with amounts, very soon after you have completed your loan application. At Pro-Active Mortgage, we don't believe in surprises, so if your costs change, we will be sure to let you know immediately.

Standard Closing Costs

• Up-front Interest Payment
• Escrow Fees
• Costs associated with "originating" your loan
• Points — These are costs you pay up-front to lower your interest rate (optional)
• Appraisal Fee
• Getting YourCredit Report

• Insurance
• Transfer Taxes and Recording Fees

• Flood or Quake Insurance
• Private Mortgage Insurance (PMI)
• Title Insurance