How do Closing Costs Work?

"Closing Costs" are the fees that pay for the various services involved when you sell or buy a home. Sellers & buyers often negotiate the payment of these costs.

As you'll see below, many of the costs result from getting your mortgage loan. At Farm Credit of the Virginias, we have extensive experience in mortgage lending, so we can compile a comprehensive list of mortgage-related costs in your "Loan Estimate".

Loan Estimate (LE)

Soon after you apply for a loan, we'll give you a "Loan Estimate" of your costs. The closing costs enumerated in the LE are estimated based on our experience with mortgage loans, but costs often change a little bit between delivery of the Loan Estimate (LE) and closing. We review Loan Estimates with buyers almost every day, so we will be happy to answer any questions you have about closing costs.

Below you'll find a generic list of costs for buying residential real estate. We will always provide you with a specific list of your closing costs when we provide your Loan Estimate.

Standard Closing Costs

Loan-Related Costs

• Escrow Account
• Taxes
• Loan-related costs
• Points — A fee paid to lower your mortgage interest rate (optional)
• Appraisal Costs
• Getting Your Credit Report
• Interest Payment

Property Taxes

• Transfer Taxes & Recording Fees
• Insurance

Homeowners Insurance

• Flood or Earthquake Insurance if applicable
• Private Mortgage Insurance (PMI)
• Title Insurance

Farm Credit of the Virginias can help you understand closing costs. Call us at (800) 919-3276.