Friday, March 13, 2009

Why Are There Two Closing Fees?

Ever wonder why there are two closing fees on a Good Faith Estimate (if it's done correctly) and on the HUD-1 settlement statement? The answer is because there are actually two closings being conducted at a purchase closing. The first, which is the loan closing, is between the buyer and the lender. The buyer generally pays for all of this fee.

The second closing is between the buyer and the seller, and is called the real estate closing. The buyer and the seller generally split this fee. Half of the fee will be in the buyer's column and the other half of the fee will be in the seller's column. Since the Good Faith Estimate only lists the buyer's closing costs, only half of the total real estate closing fee is listed on the Good Faith.

These fees are two distinct fees, so they are listed on two different lines on the Good Faith and the HUD-1.

If the transaction is a refinance, then there is only a loan closing fee.

Check out our web site for a description of all the closing fees. From our home page, click on the "How to Get Approved" link on the menu bar to the left. Here's a link to our web site:

www.mtgsupportservices.com

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