What are closing costs?

• Closing costs are the costs necessary to close the transaction of the loan or mortgage

Two Types of Closing Costs

• Recurring Costs- costs that will have to be repeatedly paid, such as interest, property taxes, mortgage insurance, homeowners insurance, etc.
• Non-Recurring Costs- costs that only occur once, such as escrow fees, loan origination fees, credit reporting fee, appraisal fee, title insurance, etc. Non-recurring costs are usually paid to a third party and usually cannot be negotiated down.

How Can I Lower My Interest Rate at the Time of Closing?

-->Discount Points

What are Discount Points?

-->A percentage point of the total loan. Paying discount points at the time of closing the loan can reduce the interest rate of the loan.

All of the closing and transaction costs are displayed in a document called the HUD-1.