FAQ #2 : What Do You Mean I Need Money For Closing Costs?

FAQ #2 ……. What Do You Mean I Need Money For Closing Costs?


This is the second blog in a series of blogs of 10 most frequently asked questions that I am asked on a weekly basis.

FAQ #2 : What Do You Mean I Need Money For Closing Costs in real estate?

What will a house closing cost you besides the down payment?

 This second question is one I get more often than you might think.

First Time Home buyers know that money is needed for Down payment.

What many of them don’t realize is that they will also need money for Closing Costs.

Even for those who are not surprised to hear that they they will have to pay Closings Costs, they are surprised to hear that Closing Costs can run them several thousand dollars.  Yes, there are ways to cover the Closing Costs and Down payment without using their own funds, but it is the surprise that there will be funds needed other than Down payment that is unexpected.


I am always prepared for silence that follows when we reach this point in the Pre-Approval Process, and I know that I have to take the time to fully explain it.  When Closing Costs are explained correctly, and they understand it, the initial shock goes away, and the discussion turns to how to best handle these unexpected costs.  That discussion might be the topic of a future FAQ blog, but for now I want to give a rundown of Closing Costs that are common to all mortgages.  Let me also stop and state at this point, that for the purpose of this blog the term Closing Costs is an all inclusive one, it includes Prepaid Costs as well.  Borrowers don’t care what category the costs fall into, they just want to know what they are for and what is their total cost.


  • Application Fee/Processing Fee
  • Appraisal Fee
  • Attorney Fee
  • Title Insurance Fee
  • Recording Fees
  • Daily Interest Charge
  • Homeowners Insurance
  • Escrows:
    • Taxes
    • Homeowners

There could be other Closing Costs such as:

  • Points
  • Credit Report
  • Flood Certification
  • Funding Fees
  • Condo Questionnaire Fee
  • Re-inspection Fee

To just name a few, but the first list of fees are common to every mortgage.  These costs can easily add up to several thousand dollars regardless of the loan size, because many are fixed cost.


Looking at the fees above someone might say, well they don’t have to escrow for taxes and insurance, but I don’t know of a lender around here that will not require that they be escrowed these days.
I had planned on my next FAQ’s blog to be about Credit Scores.  But while listing the above fees, it reminded me of a question that always comes up with regard to insurance fees.  So I think that will be the topic of the next FAQ’s blog.

What Do You Mean I Need Money For Closing Costs?


This blog post is courtesy of my guest blogger, George Souto.  Info about my guest blogger and author:

 George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut.  George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com


Ginny Lacey Gorman is your go to North Kingstown real estate agent for real estate in North Kingstown RI and beyond…knowing the geographic area, schools, happenings, important tidbits of information and businesses well.  
 Waterfront, oceanfront, luxury and coastal Rhode Island real estate are my specialty but all of RI is my backyard.   When you are in need of a true real estate professional for your buying, selling or relocating needs and an internet savvy marketer and agent who sells RI houses in this real estate market call Ginny at 401.529.7849.