All about closing costs

One of the most important things that you must be knowledgeable about when doing business in cool springs Tennessee Real Estate are the closing costs. Closing costs either buying a new home or refinancing a home. So do you know what closing costs are? And what they are for? In this article, we will be discussing all about closing costs.

 

Any time that you talk to a lender, you should be aware that they usually prepare a so-called “Good Faith Estimate” of closing costs. More frequently, as a borrower, they will give it to you right away, but they are only required to send it to you within 3 business days of application.

Since the lenders are the ones who usually prepare the estimate, many buyers associate all the closing costs and fees with the lenders. But you should know that this is not correct. Lenders are only preparing the estimate of the costs that a buyer may encounter when buying and/or refinancing  a home and it doesn’t necessarily mean that they need to list all of the possible costs. Because not all lenders know what all the costs are going to be in the buying and/ or refinancing transaction.

It is very important to understand all of the terms in a Nashville Tennessee Real Estate transaction such as the term estimate and closing costs. For those who don’t know these terms, the term estimate is defined as an educated guess based on the past experience. It was said that the closing costs or actual costs are going to be more than the estimated costs. While closing costs are costs typically paid at the closing, incurred by either the buyer or the seller. I hope that makes sense.

When you got yourself two lenders and having a hard time comparing the, what you should do is to avoid looking at the “total cost”. It is much better to only compare the costs actually charged by each lender. Because since each of the lender doesn’t know what the other offered you, what they do just makes informed guesses about the costs each one will offer.

To better understand what closing costs are, let me tell you that there are two broad categories of closing costs: Non-recurring closing costs and recurring closing costs. The first one, which is the non-recurring closing costs are things or items which the buyer has to pay just once and never pay again. While the second category, recurring closing costs, are things or items that the buyer like you has to pay again and again over the course of home ownership. Examples of the recurring costs are the property taxes and homeowner’s insurance.