Amerifirst blog

Explore our blog for insights on buying, financing, remodeling, and taking care of your home.

Back to all posts

5 Factors That Influence Your Closing Costs

Couple at laptop looking at papersHow much can I expect to pay in closing costs?

That's a common question, and a good one, especially from first-time homebuyers. Closing costs are fees that you pay to get a mortgage. These can include appraisal, title services, credit report, attorney and underwriting fees. Closing costs typically run between two and five percent of your purchase price.


Here are 5 examples of closing costs you can expect to pay:  

  1. Appraisal cost. A home appraisal is a must-have for a home mortgage. The appraisal actually protects you - the buyer - as it ensures the selling price matches the market value of the home you're buying.  An appraisal is not the same as a home inspection.
  2. Title insurance. Title insurance protects you against issues that may come up connected to the title of the property you're buying. Since the home and the land it's on have likely changed hands several times, it's possible that somewhere along the way, something went wrong. Whether it's a forged signature or a tax evasion issue, title insurance makes sure you're not on the hook for someone else's legal issues - and expenses.
  3. Underwriting and processing fees. Drawing up the paperwork, fact-checking and organizing something as big as a 15- or 30-year mortgage takes a lot of work. That behind-the-scenes work is covered by the underwriting and processing fees.
  4. Real estate broker fees. The broker handling the deal - for instance Century21, Prudential or RE/MAX - will sometimes have a fee on top of the real estate agent commission. It's usually somewhere around $200-$400.
  5. Origination fee. This is the fee from the bank to cover the cost of the loan origination. The mortgage bank typically charges around 1% of the loan amount as a loan origination fee.

At Amerifirst, we can help you look at ways to decrease your closing costs, including wrapping your closing costs into the total cost of the mortgage. You can also negotiate with the seller to pay a portion of your costs.


Cash to Close

Closing costs are sometimes confused with cash to close funds, since they're often paid at the same time. But they're different.


Simply put, cash to close is the amount you’ll need to bring to your closing to complete your real estate purchase.  It equals your purchase price and closing costs, minus your mortgage amount, earnest money deposit, and any credits from the seller or mortgage lender.


We know it's a bit confusing but don't worry. Your loan officer can explain it in more detail and answer any questions you may have. We work hard to ensure there are no surprises, especially on closing day. We’ll let you know in advance how much you’ll be expected to pay -- before you sign on the dotted line.


Want to learn how to prepare yourself to move from renting to owning? Download our free eBook for first-time homebuyers below, "Get Mortgage Ready."


Get Mortgage Ready(

Related Posts

Home Maintenance Tips for Winter

Sure, spring cleaning sounds great.  However, in reality, tackling a long home maintenance checklist all at once can be overwhelming. Rather than letting it all add up, what if you tackled home maintenance a little each season? Here are some ideas for taking care of your home during the winter months.

Tips for Paying Off Your Mortgage Faster

There are several ways to pay off your mortgage faster and save on interest payments. Even better, not all methods require spending a lot of extra money! Take a look at the list below: Make extra principal payments.  You can pay extra money toward your mortgage balance each month or make a larger, lump sum payment on your principal each year. This reduces the amount due on the mortgage as well as reducing the amount of interest that will accrue. Extra money can also be added to the principal payment from bonuses, gifts, savings and extra earnings. Just remember to make a note on the check for the money to go towards the principal! Make one extra mortgage payment per year. One of the easiest ways to make an extra payment each year is to pay half your mortgage payment every other week instead of paying the full amount once a month, otherwise known as “bi-weekly payments.” With these payments, an extra payment is made so that the total number of payments that one makes adds up to 13 payments in a year rather than the 12 that would have been made with monthly payments. This adds up to significant interest savings over the duration of a mortgage. You also want to make sure that if your lender accepts this kind of payment they will not charge you a prepayment penalty. Also verify that the bi-weekly payments are being applied to the principal amount and not the interest. Otherwise, you won't notice the savings. Reduce your balance with a lump-sum payment. Have you inherited money, earned a bonus or commission, or sold a large item? You could apply that amount to your mortgage’s principal balance. Another option is any time you have a month where you have that third paycheck, apply that to the principal on your mortgage. This will happen twice a year, adding an extra principal payment to your mortgage loan. While paying down a large debt is nice, it's not a requirement. Consider making sure you have enough to work toward other financial goals, such as an emergency fund, before paying more on your mortgage. However, there are many options you can explore that best fit your budget. You can learn more about buying your first home with our Get Mortgage Ready Guide below.

Mortgage Interest Rates Up - Is It Still a Good Time to Buy?

You've seen the headlines and heard the chatter - mortgage interest rates have gone up. How long will this last? Will this be a return to renting for people who were thinking of buying a home? Or is it just a small adjustment in the overall scheme of things? 


Call us



Get started

Apply online today