How do Closing Costs Work?

There are certain standard costs related to closing the sale of a house. Sellers and buyers almost always share these costs, as the sales contract specifies.

As you'll see below, many of the closing costs result from getting your loan. At Strategic Home Loans, Inc., we are highly experienced in mortgage lending, so we can compile a comprehensive list of costs related to your mortgage in your "Loan Estimate".

Loan Estimate (LE)

Buyers get a "Loan Estimate" of closing costs around the time the loan application is submitted to the lender. The closing costs spelled out in the Loan Estimate are estimated based on Strategic Home Loans, Inc.'s experience with mortgage loans, but costs usually change a little bit between delivery of the LE and closing. We will be glad to review the "Loan Estimate," answering your questions and pointing out costs that sometimes change slightly at closing.

Below is a fairly generic list of costs for buying residential real estate. We will provide you with a specific list of your closing costs when we give you a Loan Estimate.

Standard Closing Costs

Loan-Related Costs
  • Escrow Account
  • Taxes
  • Costs associated with "originating" your loan
  • Points — lower your mortgage interest rate (optional)
  • Appraisal Fee
  • Credit Report
  • Interest Payment
Property Taxes
  • Insurance
  • Recording Fees & Transfer Taxes
Homeowners Insurance
  • Title Insurance
  • Flood or Quake Insurance if applicable
  • Private Mortgage Insurance (PMI)

Strategic Home Loans, Inc. can answer questions about these closing costs. Call us: (805) 496-7500.