How do Closing Costs Work?

All residential real estate transactions incurs certain costs. Buyers usually pay these costs, as specified in the real estate sales contract, however, depending on State law the seller will have to cover some of the closing costs. "Closing Costs" are the fees that cover the various services involved in the sale of residential real estate. These fees can be paid out of pocket or indirectly by increasing the loan amount or charging a higher interest rate.

As the list below indicates, many of the costs result from getting your mortgage loan. At American Fidelity, we have extensive experience in residential mortgage lending, so we can provide you with a comprehensive report on costs related to your mortgage in your estimate.

Obtaining The Loan Estimate

Three days after you apply for a loan, we will give you a Loan Estimate. The Loan Estimate gives you information like insurance and taxes, closing costs, monthly payments and more. This estimate is not an approval, but it's the first step toward getting your loan.

We will be glad to review the estimate, answering questions and pointing out costs that can vary a little bit at the closing table.

We've provided a general list of closing costs below, but we will give you a specific list of closing costs, with amounts, very soon after you complete your loan application. At American Fidelity, we don't believe in surprises, so if your costs change, we will be sure to let you know immediately.

Standard Closing Costs

• Escrow Fees
• Loan-related costs
• Points — lower your interest rate (optional)
• Appraisal Costs
• Pulling Your Credit Report
• Up-front Interest Payment

• Transfer Taxes and Recording Fees
• Insurance

• Title Insurance
• Flood / Earthquake Insurance
• Private Mortgage Insurance (PMI)