What costs are involved in getting a mortgage?
Here's what you may have to pay when you close on a mortgage loan:
- Down Payment: Cash paid towards the purchase of a home.
- Private Mortgage Insurance (PMI): Required insurance to protect the mortgage lender against losses. This cost may change based on your credit score.
- Closing Costs: These are typical costs associated with obtaining a mortgage.
- Prepaid Interest: Interest paid to cover the number of days remaining in the month you close. (Amount may change based on final closing date.)
- Title Insurance: Amount paid to protect against losses resulting from claims by others against your new property.
- Points: An optional one-time amount paid by you to lower your interest rate for the life of the loan.
- Real Estate Taxes: Amount of funds collected for future tax payments. A reserve is collected at closing (escrow).