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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).

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