The closing is the final step in the home buying process. Make sure you’re prepared to pay closing costs, which can be up to 3% - 5% of the purchase price. 

 

Within 3 business days of your complete application, the lender will provide a Loan Estimate that details the fees, charges and other costs you can expect to pay beyond the sale price of your home. Closing costs typically include: 

 

  • Origination Fees - These are the lender’s charges for processing your mortgage. 
  • Settlement Services - These charges cover expenses paid to other parties on your behalf, including fees for appraisals, title search, credit reports, document recording, inspections and conveyance taxes.
  • Property Insurance - Your loan approval conditions will require you to prepay for the purchase of one year of insurance coverage to protect your new home.
  • Interest Prepayment - If you close a loan before the end of the month, the lender will require you to prepay interest on the loan for the number of days remaining in the month. 
  • Tax & Insurance Escrow Deposits – If required by your loan approval terms, you’ll also have to make initial deposits into your escrow account to pay for real estate taxes and homeowner’s insurance.
  • Mortgage Insurance - If you put less than 20% for a down payment, you may be required to have mortgage insurance and make an initial mortgage insurance payment at closing.
  • Discount Points - Sometimes, you can obtain a lower interest rate by paying points to your lender. A point represents 1% of the loan amount.
 

Can I lower my closing costs?

Most settlement services must be purchased by the lender, but you can shop around for others to get the lowest possible price. And in some cases, you may be able to ask the seller to cover some or all of the closing costs. But if you can’t, be prepared to pay up to 3%- 5% to cover your bases.  

 

Have questions? A PNC Mortgage loan officer can answer your questions about closing or any step in the mortgage process. Or learn more about working with PNC.