Why are there so many mortgage closing costs?

The essential

Your mortgage closing costs generally include:

• commissions
• lender fees
• title and escrow fees
• government fees
• Miscellaneous Fees

The transfer of property from one person to another is a transaction that must be recorded for public purposes. It is usually the largest financial transaction a person makes.

There are many different parties that make this happen, which is why there are so many closing costs.

Types of Closing Costs

Your closing costs may include commissions that are paid as part of the sale of the property. This may include real estate agent commissions and mortgage commissions. They are usually a percentage of the value of the property. They can be from several thousand dollars to tens of thousands of dollars.

Lender fees are charges that a lender will pass on to the borrower. This includes the cost of securing the loan, producing the loan documents, and transferring your money.

Title and escrow fees are fees paid to neutral third parties handling the transaction. Title fees are to make sure the title to the property is properly covered as part of the transaction. Escrow fees are the costs of having escrow do all the record keeping, signing, and filing of a home purchase that it may require.

Government fees are typically the cost of filing up-to-date property records. The transfer of title to property is usually a matter of public record.

Miscellaneous fees may include notary fees, courier fees, and other minor fees.