888-666-0844
    Click for Covid-19 impacts

Mountain Living Real EstateMountain Living Real Estate

Your Source for Summit County Real Estate

  • Search
    • Search All Properties
    • Our Listings
  • buy/sell/rent
    • Buyers
    • Sellers
    • Renters
    • Property Management
  • Communities
    • Breckenridge
    • Copper Mountain
    • Dillon
    • Frisco
    • Keystone
    • Silverthorne
    • Park County
  • Blog
  • About
    • Client Testimonials
    • Contact

Closing Costs Explained

Here is an overview of the types of closing costs you may see as a buyer on your settlement sheet.  If you are getting a loan, when you apply for it, you will receive a Loan Estimate that will break down and estimate these fees. If you’re not getting a loan your real estate agent can estimate the closing costs for you.

Lender Fees

A pile of change for closing costs
Don’t be surprised by the costs you will incur at Closing

Loan Origination Fee: This fee covers the lender’s administrative costs in processing the loan. It is often expressed as a percentage of the loan. The origination fee is typically 1% of the loan, but remember, you can obtain a loan with no origination fee and a slightly higher interest rate.

Loan Discount: Often called “points”, a loan discount is a one-time charge to adjust the yield on the loan to what market conditions demand. One point is equal to 1% of the loan amount. This fee is rare when interest rates are low.

Appraisal Fee: This one-time fee pays for an appraisal, which is a statement of property value for the lender. An independent appraiser writes the appraisal and can charge $450 to $600, or much more, depending on the home’s size and location. You will probably pay this fee to the lender when they order the appraisal and not wait until closing.

Credit Report Fee: This one-time fee covers the cost of the credit report that is run by an independent credit reporting agency and is usually about $75.

Title Insurance Fee: There are two title policies: a lender’s title policy (which protects the lender against loss due to defects on title) and a buyer’s title policy (which protects you). These are both one-time charges. In our market, the buyer is only responsible for paying for the lender policy. The lender policy can cost around $600.

Miscellaneous Title Charges: The title company may charge fees for a title search, title examination, document preparation, notary fees, recording fees, and a settlement or closing fees. These are all one-time charges and can add up to about $600.

Lender Fees: Other lender fees include an underwriting fee, a flood certification fee, an amortization schedule fee, and other miscellaneous fees that your mortgage lender should disclose at loan application. These fees vary dramatically from about $450 to $900.

Prepaid Interest: Depending on the time of month your loan closes, this charge may vary from a full month’s interest to just a few days’ interest. If your loan closes at the beginning of the month, you will probably have to pay the maximum amount. If your loan closes at the end of the month, you will only have to pay a few days’ interest.

PMI (Private Mortgage Insurance) Premium: Depending on the amount of your down payment, you may have an up-front fee for mortgage insurance (which protects the lender against loss due to foreclosure) included in your closing costs. You may also be required to put a certain amount into a special reserve account (an impound account) held by the lender for PMI.

Beginning of the Escrow Account: Your lender typically has an account where your property taxes and property insurance funds are held. This account starts with taxes approximately equal to two months in excess of the number of months that have elapsed this year. (If 6 months have passed, they will collect 8 months of taxes.) Your property insurance is often collected one year in advance, plus two months will be kept in your escrow account.

HOA Fees

HOA Dues: If your property belongs to a homeowner’s association, they will likely collect dues at closing. They will collect prorated dues for the remainder of the current month plus the next months dues. This gives them time to receive your information as a new owner and set you up to pay your dues.

Working Capital: Some HOAs charge a working capital fee every time the property changes hands. Every HOA is different but if they do, it is generally 3 months of the current dues amount. It goes into the HOA’s reserve fund. When you sell you may receive a refund of that amount but that is not generally the case.

Location Fees

Transfer Fees: Also known as transfer taxes. Some areas in Summit County charge transfer fees. Who pays is negotiable in the contract. As a result, when you go under contract you should know if you are paying the transfer fee and how much it is.

Other Fees and Credits

Earnest Money Deposit: It is important to have an understanding of the earnest money deposit, so you will not be in an uncomfortable position when you purchase a property. When the seller accepts your offer, you will give your earnest money amount to the title company. They will deposit it in their escrow account immediately. They will hold it until closing. Then, you will receive a credit in your closing costs as a partial down payment and represents your intent to purchase the property. You should anticipate an earnest money deposit of 1-2% of the purchase price. In the event that you do not qualify with a lender for a new loan, you will receive a refund of your earnest money. However, that refund is only as long as we give the sellers written notice regarding the lender’s disapproval, and provided you have supplied the lender with all documentation they have requested.

Property Taxes: In Colorado, we pay property taxes in arrears. So, at closing, you will receive a credit from the seller for property taxes. The title company will prorate the amount for the number of days the seller owned the property. If you close on January 2, you will receive a credit for one days worth of taxes. If you closed December 31, you will receive a credit for 364 days of taxes. You will then be responsible to pay the tax bill in full when you or your lender receives it.

At Closing

For the closing, you must bring a driver’s license and a cashier’s check for the remainder of your down payment.  You can wire the funds if you prefer. If you are not getting a loan you must wire your funds. A cashier’s check is not adequate. There have been cases of fraudulant wiring instructions sent out. Because of that, most title companies are now sending wiring instructions in a secure email.

There’s certainly a lot to know about closing costs! Have additional questions? Click here and let us know how we can help!

About Us

Mountain Living Real Estate, a.k.a. The Mountain Living Team, is a family owned, second generation, real estate company that has been helping buyers and sellers in Summit County since the early 90’s.  Mountain Living Real Estate is committed to going above and beyond to ensure their clients have the most amazing real estate experience possible.  Jason & Meredith take a personal approach to educate their clients, empowering them to make high quality decisions no matter the situation.  They take exceptional care throughout the sales process and beyond; striving to make each client’s path in Summit County one filled with fun, excitement & great memories.

Work with Mountain Living Real Estate and you’ll understand why so many people say, “We Love Mountain Living!”

Testimonials

View from Silverthorne

Professionally executed from start to finish

William from TX Mountain Living Real Estate November 25, 2020

Honest and realistic about pricing and negotiating. On the clients side for negotiations. Willing to go extra mile for anything we needed since we were out of state.

Kristin from VA Mountain Living Real Estate October 6, 2020

Thank you Jason and Meridith for all you did . We were very impressed from the start to the finish . Jason was very timely with his responses to any questions or concerns we had . His very calm and professional demeanor was most reassuring. The photos that Meridith took were professional grade . All Continue Reading

John from Idaho Springs, CO Mountain Living Real Estate October 2, 2020

Jason and Meredith exemplify what real estate agents should be.  We purchased two homes and sold one with them.  The attention to detail was outstanding.  It is rare in today’s world to find such a high level of customer service.   Jason and Meredith handle everything and go way above and beyond what other agents would do.  The online tools, calendar Continue Reading

Wendy from Pine, CO Mountain Living Real Estate September 14, 2020

La Riva del Lago

Thank you for going above and beyond to sell and help me close! You have been a great resource for us. We so appreciate it!

Sheila from KS Mountain Living Real Estate September 10, 2020

Most impressed with timeliness and response – working with us late in the evening. It was a pleasure. Appreciate the opportunity to work with you.

Kevin from Highlands Ranch Mountain Living Real Estate September 4, 2020

You did a wonderful job. You went up to the condo several times. Not only did you take pictures, but you set up the dining table, etc. for better showing. You came in for inspection follow up, etc. All much appreciated!! All the extra special touches and great communication from listing to closing meant a Continue Reading

Pat from Broomfield, CO Mountain Living Real Estate July 11, 2020

You went above and beyond our expectations to check out the Wetterhorn unit! You know what we like and saw the opportunity for us to purchase a unit we will enjoy!

Linda from Texas Mountain Living Real Estate June 30, 2020

Buffalo Ridge Condo

We were most impressed with the willingness to get the job done under difficult situations.

John from Manitou Springs, CO Mountain Living Real Estate April 13, 2020

January Sales get a Thumbs Up

Good communication and quick response. Knowledge of area and market. Pleasant attitude through it all.

Stacey from Texas Mountain Living Real Estate March 1, 2020

Contact Us


Jason and Meredith Adams

Jason & Meredith Adams
Mountain Living Real Estate

101 Main St, #109, PO Box 4115 Frisco, CO 80443

(888) 666-0844
team@mountain-living.com
© 2021 · Equity Framework
© 2021 · Mountain Living Real Estate, Inc.
 

Privacy Policy · Sitemap
Listings Sitemap · Log In