When you get a mortgage, you will most likely be paying closing costs at the finalization of your purchase or refinance. These costs are charged by your mortgage lender and third parties (appraisers, home inspectors, title companies, etc.) that have performed services related to your home purchase.
Typically, closing costs range from 2-5 percent of your home's purchase price, though there are ways to minimize closing costs. Here are some of the typical costs homebuyers will pay for at closing, though not all are applicable to every borrower.
When Will You Know Final Closing Costs?
After October 1st, 2015, all loan applications will abide by a new set of loan disclosure rules, called the TILA RESPA Integrated Disclosures (TRID). By these rules, after you apply for a mortgage, your lender is required to send you a loan estimate within 3 business days. This will include an Estimated Cash-to-Close sheet with fee details related to your loan.
Your lender must also provide you with a closing disclosure 3 business days prior to closing (business days include Saturdays but exclude federal holidays). So if your closing is planned for Monday, your lender must provide you with closing disclosures by the preceding Thursday. This disclosure will contain all final closing costs.
Be prepared to bring the finalized amount in the form of a cashier's check or have the funds wired on closing day.
For more information about costs associated with buying a home, download our free Mortgage 101 Handbook for everything you need to know about buying and financing your first home.