9/14/2022
The purchase of a new or used house in the United States is not very different from other countries with well-established rules for this type of negotiations.
However, it can be paper-intensive when you take out a home loan. To give you an idea of the fees included in US mortgages, we give you the details.
Common fees to close a mortgage loan in the USA
When we talk about completing the operation of a mortgage in the US, we must consider the costs associated with it. On average, closing fees are 2-5% of the total loan amount.
Since it is not recommended to include them in the interest financing, we suggest you disburse the sum through a single payment.
- Interest: From 4.75% to 5.75%
- Max term: 30 años
- Interest: Consult
- Max term: 30 años
- Interest: First years fixed-rate and the rest adjustable: SOFR + margin
- Max term: 30 años
- Interest: SOFR + margin
- Max term: 30 años
- Interest: From 5.125%
- Max term: 30 años
On the other hand, buying a home is a big step that requires a good comparison of the available offers. If it is your first home, do not hesitate to find out about aids or programs for first buyers. In addition to these resources, you have information from Busconómico to make a better decision.
Since the lender is required to describe the closing costs in the mortgage estimate, it is important to review it to understand the different fees that include:
- Property inspection fee. It's a required charge when you apply for a government-backed mortgage, such as the FHA (Federal Housing Administration) option. The bank must ensure that the home has the minimum conditions of habitability. If the problems are not serious, you can even negotiate a discount. This will cost you about $300 to $500 dollars.
- Appraisal cost. First, the financial institution must know how much the house or apartment is worth to know if it can recover the money in case you cannot pay and also to justify the amount it is requesting. The appraisal is done by an expert and usually costs from $300 to $400 dollars.
Application fee. This corresponds to the administrative processing of a new mortgage loan. Depending on the estimated time to consider your request, this charge varies from one entity to another.- Origination fee. This opening fee is one of the most expensive, with an average value of 0.5-1%. It is applied to compensate for the evaluation of the application, the administrative preparation of the paperwork and notary or legal expenses.
- Prepaid interest. In the United States, it is common for lenders to ask you to pay the accumulated interest between the moment of signing the contract and the first monthly installment. This will depend on the amount of the requested loan.
- Mortgage broker fee. When you use an agency to get the best mortgage for you, it costs you a fee. It can be a fixed amount or a percentage of the mortgage amount.
- Acquisition fee. In the event that you assume the mortgage of the owner of the home, you can be charged for the unpaid balance, and it will depend on what remains to be amortized.
- Attorney's fees. Some states require the presence of an attorney for the closing of a real estate deal. The cost of this requirement varies depending on the hours of legal assistance you accumulate.
- Title search fee. It serves to verify in public records who is the real owner of the property. It is also verified if the house includes legal claims or unpaid bills that could harm you. It usually costs $200 USD or more.
- Property taxes. It is common for buyers to pay 2 months of county and state taxes at closing.
- Annual assessments fee. When the homeowners' association requires an annual fee, this is paid in a single installment and in advance.
- Survey fee. It is used to check the dimensions and limits of the property. It does not apply to condominiums, in Florida it is optional and costs about $400 USD.
- Lender's title insurance. Some financial institutions ask for the home insurance premium in advance. While some require a global payment to cover the life of the mortgage loan, others only request the first year. The insurance is worth between 0.55 and 2.25% of the purchase price.
- Upfront mortgage insurance charge. If you pay a down payment of less than 20%, you must take out private insurance (PMI). Your cost varies depending on the amount covered and the insurer.
As you can see, buying a home in the USA is not cheap at all. Even so, in Busconómico you can find the best mortgage offers in this market, with frequently updated information in both english and spanish.
En español: Comisiones de las hipotecas en USA