Veteran St. Cloud homebuyers won’t need to spend much time reading the following—they’re already familiar with the stack of documents that accompany a closing. At closing, they had only to sign on the dotted lines (they aren’t actually dotted—but never mind). By then, their Realtor^® (ideally, that’s me) has acquainted them with the sheaf of papers they are finalizing—so the following details haven’t come as news.

Usually, the bulk of the paperwork deals with creating the home loan: the closing costs. These can be either mostly inconsequential or head-swiveling (what-th????). For anyone about to embark on a home purchase for the first time, here’s a quick rundown of the closing costs you may encounter. Your veteran real estate professional will provide more in-depth information, but here’s a quick rundown of the two flavors to expect:

Prepaid Costs

·         real estate taxes

·         insurance

·         prepaid interest

·         private mortgage interest

These deal with the charges that will be incurred at regular intervals throughout the term of the home loan. These will be prorated and included in the regular monthly payments, but at the opening bell, some are collected into a temporary pass-through account (the escrow account) which gets everything started.

Non-Recurring Costs

·         Credit report – offsets the lender’s expense in compiling your credit history from the credit bureaus.

·         Origination fee — covers the lender’s bill for creating the loan: an amount that can range from 1% to 5%, depending on the size and type of mortgage.

·         Underwriting fees — pays the cost of evaluating and verifying the information on your loan application.

·         Appraisal fee — pays the Appraiser’s fee for determining the property’s value.

·         Survey fees — pays for the cost of verifying the property lines.

·         Flood Zone certification fee — pays for verifying whether any portion of the underlying property lies in a declared flood zone area.

·         Title search fee — pays for researching whether liens or unpaid mortgage payments exist on the property.

·         Lender’s title insurance — insures the lender against losses due to possible ownership challenges.

·         Recording fees — pays for government recording charges.

·         Discount points — (optional) pays a lump sum (if chosen) that decreases the loan’s interest rate—and monthly payment amount.

 There won’t be any surprises by signing time, not only because of the GFE (“Good Faith Estimate”)—but also because we’ll have gone over everything together long in advance. Questions? Call anytime!

Providing a superior level of informed, professional real estate services to buyers and sellers throughout Central Minnesota. We have agents specializing in residential, commercial, multifamily, new construction, existing, investment properties, foreclosures/REO, and short sales with offices located in:

Multiple Office Locations To Serve YOU!

Saint Cloud 320-259-4554

Princeton 320-983-3555

Sartell 320-259-4554

Little Falls 320-259-4554

Minneapolis 763-565-2000

Hutchinson 320-455-9127

Litchfield 320-298-1140

Premier Real Estate specializes in MANY areas around Central MN including Saint Cloud, Waite Park, Rice, Royalton, Sartell, Royalton, Little Falls, Cold Spring, Saint Joseph, Elk River, Monticello, Ramsey, Saint Michael, Andover, Ham Lake, Anoka, Champlin, Buffalo, Glencoe, Brownton, Silver Lake, Kandiyohi, Dassel, Minneapolis, Maple Grove, Saint Louis Park, Saint Paul, Robbinsdale, Crystal, New Hope, Brooklyn Center, Brainerd, Nisswa, Aitkin, Albany, Coon Rapids, Sauk Rapids and more!