Different Types of Closing Costs
When buying a home, you need to know and understand the different payments that you are required to make. Among the payments you are going to make as a home buyer are closing costs. Any charges that are not part of the purchase price itself are called closing costs. Different fees such as those paid as lawyers’ fees, real estate commissions, title fees, documentary transfer tax, appraisal fees and loan fees all make up closing cost.
There are two types of closing costs. These are the recurring and nonrecurring types. Recurring closing costs are those payments that a homeowner has to keep paying. These include property insurance, interest and taxes. As a homeowner, you may decide to repay these costs each year, or include them in a new mortgage payment plan. Non recurring closing costs are those that are paid once at closing. Examples of such fees are application fees, title search, origination points, appraisal fees and discounts.
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