How do Closing Costs Work?

There are certain standard costs associated with closing the sale of a house. Buyers and sellers almost always share these costs, as the sales contract specifies.

Many of the closing costs associated with buying residential real estate are associated with getting a mortgage loan. Since First Community Bank of Central Al. is highly experienced with mortgages & closings, we can help you understand your closing costs.

Loan Estimate (LE)

Buyers get 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 First Community Bank of Central Al.'s experience with mortgage loans, but costs often change by small amounts between the LE and closing. We explain LEs with buyers every day, so we'd be glad to answer your questions about closing costs.

Below is a fairly general list of costs for buying residential real estate. We will always provide you with a specific list of your closing costs when we give you a Loan Estimate.

Standard Closing Costs

Loan-Related Costs
  • Up-front Interest Payment
  • Escrow Account
  • Taxes
  • Loan Origination Fee
  • Points — These are costs you pay up-front to lower your mortgage interest rate (optional)
  • Appraisal Costs
  • Credit Report
Property Taxes
  • Insurance
  • Recording Fees & Transfer Taxes
Homeowners Insurance
  • Flood or Earthquake Insurance
  • Private Mortgage Insurance (PMI)
  • Title Insurance

At First Community Bank of Central Al., we answer questions about closing costs every day. Call us: (334) 285-8850.

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