How do Closing Costs Work?

Every home sale incurs fixed costs. Sellers and buyers customarily share these costs, as the sales contract specifies.

As you'll see below, many of the buyer's closing costs cover the costs of originating the loan. At First Community Bank of Central Al., we have extensive experience in residential mortgage lending, so we can provide you with a comprehensive report on costs related to your mortgage in your "Loan Estimate".

Loan Estimate (LE)

Buyers will receive a "Loan Estimate" of closing costs at the time the loan application is submitted to the lender. The closing costs enumerated in the LE are estimated based on our experience with mortgage loans, but costs usually change a little bit between the LE and closing. We will be glad to review the "Loan Estimate," answering questions and highlighting costs that sometimes vary a little bit at the closing table.

Below you'll find a fairly general list of closing costs. We will provide a specific list of your closing costs when we deliver your Loan Estimate.

Standard Closing Costs

Loan-Related Costs
  • Various Taxes
  • Loan Origination Fee
  • Points — A fee paid to lower your interest rate (optional)
  • Appraisal Costs
  • Credit Report
  • Up-front Interest Payment
  • Escrow Account
Property Taxes
  • Insurance
  • Recording Fees and Transfer Taxes
Homeowners Insurance
  • Flood / Earthquake Insurance if applicable
  • Private Mortgage Insurance (PMI)
  • Title Insurance

First Community Bank of Central Al. can answer questions about these closing costs. Call us: (334) 285-8850.

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