Mortgage Insurance Premium

Oct 13, 2025 by wbrum.org 50 views

The List of Closing Costs on a Home Loan: A Mathematical Breakdown

When purchasing a home, one of the most significant expenses is the closing cost, which can range from 2% to 5% of the home's purchase price. In this article, we will explore the closing costs associated with a home loan of $185,000, and provide a mathematical breakdown of each cost.

The list below shows the closing costs on a home loan amount of $185,000.

Closing Cost	Charge
Loan origination	$275
Title insurance	$528
Appraisal fee	$300
Credit report fee	$25
Flood determination fee	$15
Mortgage broker fee	$500
Underwriting fee	$300
Inspection fee	$300
Survey fee	$200
Attorney fee	$500
Recording fee	$100
Transfer tax	$2,000
Mortgage insurance premium	$1,500
Private mortgage insurance premium	$1,000
Homeowners insurance premium	$1,000
Property tax	$1,500
Total closing costs	$12,325

Let's take a closer look at each closing cost and provide a mathematical breakdown.

Loan Origination

The loan origination fee is a charge imposed by the lender for processing the loan application. In this case, the loan origination fee is $275.

Formula: Loan Origination Fee = $275

Title Insurance

Title insurance is a type of insurance that protects the buyer and lender from any defects in the title of the property. The title insurance fee is $528.

Formula: Title Insurance Fee = $528

Appraisal Fee

The appraisal fee is a charge imposed by the appraiser for evaluating the value of the property. In this case, the appraisal fee is $300.

Formula: Appraisal Fee = $300

Credit Report Fee

The credit report fee is a charge imposed by the credit reporting agency for providing the lender with the buyer's credit report. In this case, the credit report fee is $25.

Formula: Credit Report Fee = $25

Flood Determination Fee

The flood determination fee is a charge imposed by the lender for determining whether the property is located in a flood zone. In this case, the flood determination fee is $15.

Formula: Flood Determination Fee = $15

Mortgage Broker Fee

The mortgage broker fee is a charge imposed by the mortgage broker for arranging the loan. In this case, the mortgage broker fee is $500.

Formula: Mortgage Broker Fee = $500

Underwriting Fee

The underwriting fee is a charge imposed by the lender for reviewing the loan application and making a decision on the loan. In this case, the underwriting fee is $300.

Formula: Underwriting Fee = $300

Inspection Fee

The inspection fee is a charge imposed by the home inspector for evaluating the condition of the property. In this case, the inspection fee is $300.

Formula: Inspection Fee = $300

Survey Fee

The survey fee is a charge imposed by the surveyor for evaluating the boundaries of the property. In this case, the survey fee is $200.

Formula: Survey Fee = $200

Attorney Fee

The attorney fee is a charge imposed by the attorney for reviewing the loan documents and providing legal advice. In this case, the attorney fee is $500.

Formula: Attorney Fee = $500

Recording Fee

The recording fee is a charge imposed by the county recorder for recording the deed and mortgage documents. In this case, the recording fee is $100.

Formula: Recording Fee = $100

Transfer Tax

The transfer tax is a tax imposed by the state and local government for transferring the ownership of the property. In this case, the transfer tax is $2,000.

Formula: Transfer Tax = $2,000

Mortgage Insurance Premium

The mortgage insurance premium is a charge imposed by the lender for insuring the loan against default. In this case, the mortgage insurance premium is $1,500.

Formula: Mortgage Insurance Premium = $1,500

Private Mortgage Insurance Premium

The private mortgage insurance premium is a charge imposed by the private mortgage insurer for insuring the loan against default. In this case, the private mortgage insurance premium is $1,000.

Formula: Private Mortgage Insurance Premium = $1,000

Homeowners Insurance Premium

The homeowners insurance premium is a charge imposed by the insurance company for insuring the property against damage or loss. In this case, the homeowners insurance premium is $1,000.

Formula: Homeowners Insurance Premium = $1,000

Property Tax

The property tax is a tax imposed by the state and local government for taxing the property. In this case, the property tax is $1,500.

Formula: Property Tax = $1,500

The total closing costs on a home loan of $185,000 are $12,325.

Formula: Total Closing Costs = $12,325

In conclusion, the closing costs on a home loan of $185,000 can range from 2% to 5% of the home's purchase price. The list above shows the closing costs associated with a home loan of $185,000, and provides a mathematical breakdown of each cost. It's essential to understand these costs to avoid any surprises during the home buying process.

Based on the mathematical breakdown above, we recommend the following:

Shop around for lenders and mortgage brokers to get the best rates and fees.
Consider working with a mortgage broker who can help you navigate the loan process and negotiate better rates and fees.
Review the loan documents carefully to ensure that you understand all the terms and conditions of the loan.
Consider hiring a real estate attorney to review the loan documents and provide legal advice.
Make sure to factor in the closing costs when calculating the total cost of the home.

By understanding the closing costs associated with a home loan, you can make informed decisions and avoid any surprises during the home buying process.
Frequently Asked Questions (FAQs) About Closing Costs on a Home Loan

In our previous article, we discussed the closing costs associated with a home loan of $185,000. In this article, we will answer some frequently asked questions (FAQs) about closing costs on a home loan.

A: Closing costs are fees and charges associated with the home buying process, including loan origination fees, title insurance, appraisal fees, and more.

A: Closing costs can range from 2% to 5% of the home's purchase price. In the case of a $185,000 home, the total closing costs would be $3,700 to $9,250.

A: Typically, the buyer pays closing costs, but in some cases, the seller may also contribute to the costs.

A: The most common closing costs include:

Loan origination fee
Title insurance
Appraisal fee
Credit report fee
Flood determination fee
Mortgage broker fee
Underwriting fee
Inspection fee
Survey fee
Attorney fee
Recording fee
Transfer tax
Mortgage insurance premium
Private mortgage insurance premium
Homeowners insurance premium
Property tax

A: Yes, you can negotiate closing costs with your lender or mortgage broker. However, be aware that some costs, such as title insurance and appraisal fees, may be non-negotiable.

A: Here are some tips to reduce closing costs:

Shop around for lenders and mortgage brokers to get the best rates and fees.
Consider working with a mortgage broker who can help you navigate the loan process and negotiate better rates and fees.
Review the loan documents carefully to ensure that you understand all the terms and conditions of the loan.
Consider hiring a real estate attorney to review the loan documents and provide legal advice.
Make sure to factor in the closing costs when calculating the total cost of the home.

A: A loan origination fee is a charge imposed by the lender for processing the loan application, while a mortgage broker fee is a charge imposed by the mortgage broker for arranging the loan.

A: Yes, you can roll closing costs into your loan, but be aware that this may increase your monthly mortgage payment and interest rate.

A: The time it takes to close on a home can vary depending on the complexity of the transaction and the efficiency of the parties involved. Typically, it takes 30 to 60 days to close on a home.

In conclusion, closing costs on a home loan can be complex and confusing. By understanding the FAQs above, you can make informed decisions and avoid any surprises during the home buying process.

Based on the FAQs above, we recommend the following:

Shop around for lenders and mortgage brokers to get the best rates and fees.
Consider working with a mortgage broker who can help you navigate the loan process and negotiate better rates and fees.
Review the loan documents carefully to ensure that you understand all the terms and conditions of the loan.
Consider hiring a real estate attorney to review the loan documents and provide legal advice.
Make sure to factor in the closing costs when calculating the total cost of the home.

By understanding the FAQs above, you can make informed decisions and avoid any surprises during the home buying process.