If you think that after making the down-payment for the new house you have done all with buying. You might be very wrong. There are various other closing costs that you will have to pay as well in order to patch up your purchase fully.
Some of these are non-recurring costs while many others are recurring costs. In this context, recurring costs stand for the costs that you will be paying for again and again and non-recurring costs mean exactly the opposite for that matter.
For the purpose of general categorization of these various closing costs, they include costs such as those of title transfers, courier service charges, inspection costs, fees of the lender and reserves to set up impound accounts.
Be Familiar with your Closing Costs:
Purchasing a house may prove to be a titanic job. Therefore you must be very well familiar with the methodology and types of closing costs just as you are with your down-payments. Generally, closing costs comprise of about 2 to 4 percent of the purchase price. In this case, a great deal is dependent on the magnitude of fees charged by your lender.
Check for your Non-recurring Closing Costs:
You should have a very clear understanding of the types of non-recurring closing costs you are paying, which are the costs you pay for only once. The items that belong to this category of closing costs include title policies, escrow, wire fees, courier fees, recording fees, attorney fees, transfer taxes, endorsements, natural hazard disclosures and many others.
An Overview of Recurring Closing Costs:
Recurring closing cost are those that you will be required to pay for again and again. The most common of these costs include payments for various kinds of premiums such as fire and flood insurances and mortgage insurance. They also include property taxes and the already paid interest.
Is your Seller Crediting you?
You should be absolutely clear about the rules that your lender charts down for you. Does it allow your seller to credit you for closing costs? Well, it may, depending upon your FICO scores and the magnitude of your down-payments.
If you have financed 100 percent of the purchase price the credit may be up to 3 percent. In other cases, your lender may allow your seller to credit you for as much as 6 percent.
