Closing costs are expenses charged due to the sale of property or to the origination of a loan.
These costs include escrow fees, title fees, lender fees, commission, and other payoffs and disbursements.
Each transaction is different and each company is different so the charges are different.
Escrow Fees:
An escrow fee is charged by the escrow company to cover processing costs and the handling of and accounting for all monies involved.
The fee also covers the preparation of instructions, amendments, and other legal documents that are pertinent to the transaction.
The escrow company may also charge a demand fee and a Home Owners Association (HOA) document or transfer fee.
The demand fee is charged for requesting and processing pay-off figures for loans and other liens that are attached to the property involved.
The HOA document and transfer fee is charged when the escrow officer has to process and copy HOA governing documents when the property is located in a development governed by Home Owners Association statutes.
Lenders Fees:
Lender's fees are charged by the lender for processing the loan package.
This includes document gathering and preparation, obtaining credit reports and any other documentation needed to facilitate the process.
The fees also pay for underwriting the loan, preparing loan documents and the funding of the loan.
The appraisal fee is normally paid directly to the appraiser when he is physically at the property.
The credit report fee is paid to the Credit Bureau if there is a charge for the report.
Other charges by the lender may include flood certification, orientation, tax service, tax impounds and a wiring fee.
Title Fees:
A Title Company issues title insurance policies regarding real property.
An owner's title policy insures that the title to a property is free and clear of clouds such as encumbrances or other defects.
A lender's title policy covers the amount of the loan based on the loan amount.
A sub-escrow fee is charged when loans, property taxes or other encumbrances have to be paid through the title company.
Other fees include document transfer costs, lender's endorsements, recording of deeds, wiring funds, and messenger services.