Todd Riley
4061 Laurel Canyon Blvd Studio City, CA Phone: 818-538-6331 Mobile: 818-538-6331 Fax: 818.647.0170 Email Todd

Save up to $2500 Off Your Closing Costs!


You could save up to $2500 Off Your Closing Costs.  Just purchase or sell a home through Me and I will Pay Up to $2500 of your Closing Costs!  It's That Simple!  Full Service and a Rebate! 

WHAT ARE CLOSING COSTS


 

BUYER'S CLOSING COSTS

When you talk to a lender, they usually prepare a "Good Faith Estimate" of closing costs.  Sometimes they will give it to you right away, but they are only required to mail it to you within three business days of application.

Because the lender is the one who prepares the estimate, many buyers associate all the closing costs with the lender.  This is not correct.  The lender is only preparing an estimate of the costs you may incur when buying or refinancing and is not required to list all potential costs.  Nor does the lender know what all the costs are actually going to be.  The estimate is an educated guess based on past experience.  Some things will get left out.  Always anticipate the actual costs are going to be more than the estimate.

When comparing two lenders, don't look at the "total" cost.  Only compare the costs actually charged by each lender.  Both lenders are only making informed guesses about costs charged by others.

There are two broad categories of closing costs. Non-recurring closing costs are items that are paid once and you never pay again. Recurring closing costs are items you pay time and again over the course of home ownership, such as property taxes and homeowner´s insurance.  

Some of the items that appear here do not traditionally appear on a lender's Good Faith Estimate and lenders are not required to show all of these items.

Non-Recurring Closing Costs Associated with the Lender.
by Terry Light and RealEstate ABC

Loan Origination Fee ? The loan origination fee is often referred to as "points." One point is equal to one percent of the mortgage loan. As a rule, if you are willing to pay more in points, you will get a lower interest rate. On a VA or FHA loan, the loan origination fee is one point. Anything in addition to one point (on government loans) is called "discount points."

Loan Discount ? On a government loan, the loan origination fee is normally listed as one point or one percent of the loan. Any points in addition to the loan origination fee are called "discount points." On a conventional loan, discount points are usually lumped in with the loan origination fee.

Appraisal Fee ? Since your property serves as collateral for the mortgage, lenders want to be reasonably certain of the value and they require an appraisal. The appraisal looks to determine if the price you are paying for the home is justified by recent sales of comparable properties. The appraisal fee varies, depending on the value of the home and the difficulty involved in justifying value. Unique and more expensive homes usually have a higher appraisal fee. Appraisal fees on VA and FHA loans are higher than on conventional loans because they require the appraiser to inspect items not strictly associated with value.

Credit Report ? As part of the underwriting review, your mortgage lender will want to review your credit history. The credit report can be as little as seven dollars, but normally runs between $21 and $60, depending upon the type of credit report required by your lender.

Lender´s Inspection Fee ? You normally find this on new construction and is associated with what is called a 442 inspection. Since the property is not finished when the initial appraisal is completed, the 442 inspection verifies that construction is complete with carpeting and flooring installed.

Mortgage Broker Fee ? About seventy percent of loans are originated through mortgage brokers and they will sometimes list your points in this area instead of under Loan Origination Fee. They may also add in any broker processing fees in this area. The purpose is so that you clearly understand how much is being charged by the wholesale lender and how much is charged by the broker. Wholesale lenders offer lower costs/rates to mortgage brokers than you can obtain directly, so you are not paying "extra" by going through a mortgage broker.

Tax Service Fee ? During the life of your loan you will be making property tax payments, either on your own or through your impound account with the lender. Since property tax liens can sometimes take precedence over a first mortgage, it is in your lender´s interest to pay an independent service to monitor property tax payments. This fee usually runs between $70 and $80.

Flood Certification Fee ? Your lender must determine whether or not your property is located in a federally designated flood zone. This is a fee usually charged by an independent service to make that determination.

Flood Monitoring ? From time to time flood zones are re-mapped. Some lenders charge this fee to maintain monitoring on whether this re-mapping affects your property.

Other Lender Fees

We put these in a separate category because they vary so much from lender to lender and cannot be associated directly with a cost of the loan. These fees generate income for the lenders and are used to offset the fixed costs of loan origination. The Processing Fee above can also be considered to be in this category, but since it is listed higher on the Good Faith Estimate Form we did not also include it here. You will normally find some combination of these fees on your Good Faith Estimate and the total usually varies between $400 and $700.

Document Preparation ? Before computers made it fairly easy for lenders to draw their own loan documents, they used to hire specialized document preparation firms for this function. This was the fee charged by those companies. Nowadays, lenders draw their own documents. This fee is charged on almost all loans and is usually in the neighborhood of $200.

Underwriting Fee ? Once again, it is difficult to determine the exact cost of underwriting a loan since the underwriter is usually a paid staff member. This fee is usually in the neighborhood of $300 to $350.

Administration Fee ? If an Administration fee is charged, you will probably find there is no Underwriting Fee. This is not always the case.

Appraisal Review Fee ? Even though you will probably not see this fee on your Good Faith Estimate, it is charged occasionally. Some lenders routinely review appraisals as a quality control procedure, especially on higher valued properties. The fee can vary from $75 to $150.

Wire Transfer Fee - in the "olden days" lenders usually funded their loans with a check.  Because of changes made in state laws to benefit banks and savings & loans, mortgage bankers mostly switched to funding by wire, which provided an excellent opportunity to add a new fee to the list of closing costs.

Warehousing Fee - This is rarely charged and begins to border on the ridiculous.  However, some lenders have a warehouse line of credit and add this as a charge to the borrower.

SELLER"S CLOSING COSTS

"Closing Costs" are the fees associated with the selling (or buying) of a home.  Some fees are automatically assigned to either the buyer or the seller; other costs are either negotiable or determined by local custom.  Closing costs depend on many factors such as purchase price, commission, County and/or State of sale. 

These fees and who (Buyer or Seller) is responsible for paying them will be spelled out in the Purchase Agreement.  Ask your Realtor® or Escrow Company for an estimated Closing Costs Statement

What are the typical Seller closing costs?

  • All loans and fees associated with the loans.
  • Broker's commission
  • Transfer taxes (varies by location but Los Angeles City is $4.50 per $1,000 and Los Angeles County is $1.10 per $1,000
  • Prorated property taxes (Proration between the seller and buyer of the current property tax billing, to allocate to each their cost for the time property is owned. 
  • Title insurance
  • Documentary Stamps on the Deed
  • Seller's portion of the escrow fee (Intervalley Escrow charges $200 base plus $2 per $1,000)
  • Mandatory government retrofit standards, inspections and reports if required by law. (water conservation certificate, smoke detectors, Gas earthquake safety shut-off valve, Natural Hazards Zone Disclosure, water heating bracing)
  • Homeowner's association transfer fee and fee to provide documents
  • Homeowner's association dues (prorated)
  • Pest control inspection and the cost of any Section 1 work
  • Home warranty plan (aka home protection plan)
  • Miscellaneous fees (notary fees, messenger fees, etc.)

Who pays for closing costs?
It has become common to ask the seller to pay some or all of the closing costs. This can occur when a buyer does not have the cash for the down payment and the closing costs. This should be clearly spelled out in the Purchase Contract Agreement.


To find out more about Property Taxes visit  http://www.lacountyassessor.com

This is not intended to be a complete list of  closing costs.  Your actual buyer fees may be different as negotiated in your contract.

This Offer Does Not Apply to Existing Clients and Applies to New Clients as of 9/15/06

This Offer will not Apply to Clients Who Have Been Referred by Another Licensed Real Estate Agent Receiving a Referral Fee from Us

This Offer will not Apply to Clients Who Have Been Referred by any Organization Receiving a Referral Fee from Us (i.e., Credit Union , Organizations, Affinity Programs, Referring Websites etc).

This Offer will not Apply to Clients Who We Pay Any Referral to Anyone – Known or Unknown to the Client.

This Applies to Sales Which Have a Selling or Listing Office Commission of at Least 2.5%

Rebate cannot exceed $2500 and is based on Sales Price Multiplied Times 0.25% - example Sales price is $800,000 – Times 0.25% = $2000.

Payment to be a credit towards closing cost at close of escrow.