When you find your dream home after searching through McKinney, Texas homes for sale, half the battle is over. Finding your home is the biggest challenge, but once you’ve chosen the perfect house, the home buying process is far from over. After you have been approved by a lender for a home mortgage, you must then prepare for the mortgage loan closing. There are many fees that you may see on the statement the lender provides you before closing. Some of these fees you may not understand. Learn what they are and whether or not they are necessary before signing your mortgage loan closing agreement.
Here are some of the closing fees you may see listed on the statement given to you by the lender when closing on McKinney, Texas homes for sale:
- Application fee – This fee covers the lender’s cost of processing the loan and other expenses, such as the cost of obtaining your credit report. The application fee can vary from less than $100 to several hundred dollars.
- Appraisal fee – The lender will require you to have an appraisal completed for the property you are buying. This guarantees them that the property is worth the amount they are loaning to you for your mortgage. Appraisals vary in price but will probably cost at least $200.
- Points – Points can be charged at your loan closing to reduce the interest rate of your mortgage loan. Sometimes, it is possible to finance points on a home through the mortgage lender. Ask your mortgage lender if this is a possibility for your home loan.
- Loan origination fee – This is a fee for preparing documents, notary fees, and attorney’s fees. Sometimes, if your down payment amount is large enough, your lender may reduce the amount of this fee. You should expect a loan origination fee of a few thousand dollars.
- Inspection fees – There are various inspections that need to be completed to ensure the home is in sellable condition. Some of the inspections that may be performed include termite, structural, or septic system inspections. Inspections may run around $200-500.
- Private Mortgage Insurance – This is also referred to as PMI insurance. This is an insurance that protects the lender should you default on your loan. Whether or not you need this will depend upon what type of loan you have and how much you are paying down. If you don’t think you need this, check with your lender for more details.
- Property survey – This verifies the legal location of the home. It can cost less than $100 to a few hundred dollars. There are other fees that you may see when reviewing loan closing paperwork for McKinney, Texas home for sale. If there is anything you do not understand, ask for a full explanation before signing any documents.