How do Closing Costs Work?

All residential real estate transactions incurs fixed costs. Sellers and buyers customarily split these costs, as specified in the sales contract.

As you'll see below, many of the buyer's costs are related to the costs of originating the loan. At Power Purchase Mortgage, we have extensive experience in mortgage lending, so we can provide you with a comprehensive report on mortgage-related costs in your "Loan Estimate".

Loan Estimate (Also known as the LE)

Buyers will receive a "Loan Estimate" of closing costs at the time the loan application is submitted to the lender. This cost estimate is based on our past experience. Please note that while our LEs are very accurate, we can't always estimate costs to the penny. We will be glad to review the "Loan Estimate," answering your questions and pointing out costs that can vary a little bit at the closing table.

Below is a fairly generic list of costs for buying a home. We will always provide you with a specific list of your closing costs when we deliver your Loan Estimate.

Standard Closing Costs

Loan-Related Costs
  • Interest Payment
  • Escrow Account
  • Various Taxes
  • Costs associated with "originating" your loan
  • Points — lower your mortgage interest rate (optional)
  • Appraisal Costs
  • Obtaining YourCredit Report
Property Taxes
  • Insurance
  • Transfer Taxes and Recording Fees
Homeowners Insurance
  • Title Insurance
  • Flood or Quake Insurance
  • Private Mortgage Insurance (PMI)

At Power Purchase Mortgage, we answer questions about closing costs every day. Give us a call: (800)593-0143.

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