How do Closing Costs Work?

There are certain standard costs related to closing the sale of a house. Buyers and sellers customarily share these costs, as the sales contract specifies.

As indicated below, many of the costs result from getting your mortgage. Since The Reen Team at American Pacific Mortgage has extensive experience with mortgages and closings, we often explain the details of closing costs.

Loan Estimate (LE)

Buyers get a "Loan Estimate" of closing costs around the time the loan application is submitted to the lender. We base this closing cost estimate on our many years of past experience. It's important to note that while our LEs are very precise, we can't always estimate costs to the penny. We will be glad to review the "Loan Estimate," answering questions and pointing out costs that sometimes vary a little bit at the closing table.

Below is a general list of closing costs. We will always provide a specific list of your closing costs when we provide your Loan Estimate.

Standard Closing Costs

Loan-Related Costs
  • Loan Origination Fee
  • Points — lower your interest rate (optional)
  • Appraisal Fee
  • Obtaining Your Credit Report
  • Up-front Interest Payment
  • Escrow Account
  • Various Taxes
Property Taxes
  • Recording Fees and Transfer Taxes
  • Insurance
Homeowners Insurance
  • Private Mortgage Insurance (PMI)
  • Title Insurance
  • Flood / Earthquake Insurance if applicable

At The Reen Team at American Pacific Mortgage, we answer questions about closing costs every day. Give us a call at (408) 626-1879.

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