QandAs: Loans

What is a closing statement?

Answer:
If you’ve ever purchased a new home, you’re

likely familiar with a real estate closing statement. Real estate closings are highly anticipated. This is the last part of the home buying process, in which buyers finalize the deal and receive the keys to their new property.

However, closing can also be a stressful period. Often times, buyers have to pay settlement fees, which are miscellaneous expenses that amount to approximately 3% - 5% of the purchase price. This out-of-pocket expense is paid at closing and the details are included on the closing statement.

A real estate closing statement also includes information on credits given to the new home owner. Buyers and sellers typically negotiate specific financial terms. For example, the seller may agree to pay a percentage of the new owner’s closing fees or make payments toward other items. If so, this information is listed on the closing statement.

Additionally, the closing statement provides new owners with an itemized list of settlement fees. This way, the borrower has a clear idea of the funds needed to finalize the real estate transaction. Typical fees outlined on a real estate closing statement include attorney fees, title fees, loan origination fees, insurance, and escrow balance.


	more Q&A sessions like this
	What are typical application fees for a mortgage loan? Is a home equity loan considered refinancing? What is Escrow Disbursement? Is debt consolidation an easy process? What is an Agreement of Sale?