Closing Costs in Long Beach, CA

Closing Costs in Long Beach, CA

Closing costs are part of the home buying process in Long Beach, California – same as in every other place across the United States. But what exactly are closing costs and what items are included when you buy a home in Long Beach?

Closing costs are the fees and other costs that you’re required to pay to complete a home buying transaction. Closing costs are not part of the actual cost of the property and the down payment.

Rather, closing costs are separate costs and they are often within 2 to 5 percent of the loan amount. Closing costs are usually incurred by the buyer and the seller. However, the buyer is responsible for most of the closing costs.

If you buy a home in Long Beach, CA, what fees and other expenses should you expect in your closing cost:

Long Beach, CA Mortgage Closing Cost Fees

Here are items (fees and costs) that are included in Long Beach’s closing costs:

Underwriting and Processing Fee

This is a fee that the lender requests for in order to underwrite your loan. Underwriting means the lender has to conduct some research to verify the financial information you provide including income employment and credit prior to your final loan approval.

Origination Fee

This is the cost charged by your Mortgage Company or lender to cover for all the administrative costs that are related to your mortgage application and processing.

Credit Report Fee

This is a fee of about $15 – $30 that is paid to a lender for their services to pull your credit report from the three major credit bureaus (TransUnion, Equifax and Experian).  However, some lenders get discounts from these agencies and such lenders may decide to waive this fee.

Appraisal(s) Fees

This is usually paid to the lender as part of the closing costs to have an appraiser that will establish the value of the property you’re buying.

Flood Certification

This is a paperwork that confirms the home’s condition within a flood zone and it is issued by the Federal Emergency Management Agency (FEMA).

Tax Service Fee

This is a legitimate closing cost that is evaluated and collected by a lender to make sure that a mortgagor pays his or her property taxes at the appropriate time. This service fee was created because lenders are interested in safeguarding their access to collateral if a borrower defaults.  

Title Search and Lenders Title Insurance

This is the cost that is related to asking a company to research a home’s title. It also involves buying an insurance policy to protect the lender in the event that the title is later found to contain flaws.

Owner’s Title Insurance Policy

This is a policy that protects the buyer as a borrower against any legal flaw to the title. If anyone challenges your ownership of the property for any reason, this is policy that will protect you.

Survey

This is a thorough evaluation that indicates the precise boundaries of the property including things such as encroachments, gas lines, easements, roads, and walls etc.  

Escrow Property Taxes

This is an amount of money that is set aside to cover for the cost of property taxes which is held by a third party until the real estate transaction is finalized. Property taxes are a government levy depending on the market value (as evaluated by a local tax assessor) of the home.

Closing/Escrow/Settlement

This fee is paid to the third party who oversees the closing. It can be the title company, Escrow Company, or even an attorney.  

Recording Fee

This is the amount of money you’re required to pay to make a public record of your home buying transaction.

Transfer Tax

This is the tax that is levied to transfer the property title from the seller to the new owner (the buyer).  

Lead-Based Paint Inspection

This is the fee for hiring a certified inspector to ascertain if the home has a harmful lead-based paint.

Brokerage Commission

This is usually a typical closing cost that the seller is required to pay. Once the seller pays the brokerage fee, it is split between the real estate agents. This fee is usually about 6% of the property sale price.

Final thought

One of the easiest methods of paying your closing costs is to make the payment out-of-pocket as a one-time cost. Also, you can finance your closing costs by folding them into your loan if your lender agrees. If you do, you’ll be required to pay interest on such costs throughout the mortgage’s lifetime.

To help you out with the precise items on your closing costs, your lender is mandated to indicate your closing costs in the Loan Estimate they send to you when you initially applied for the loan.

In addition, your lender will outline your closing cost in the Closing Disclosure document they will send to you few days prior to the settlement. It is your responsibility to review both documents closely to ensure that they match and to ask questions if there’s anything that seems unclear.

Furthermore, you should consider scheduling your closing to take place at the end of the month. If you have a closing day that is closer to the end of the month, it will help you slash your prepaid daily interest charges. Your lender cam help you determine how much you can save by closing at the end of the month.

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