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Do you know the difference between Non-Recurring and Recurring Closing Costs?

Posted on Nov 17, 2011 by in Active Rain | 0 comments

Do you know the difference between Non-Recurring and Recurring Closing Costs?

There are some buyers and sellers have no idea what Closing Costs are hence I figured I would share here.

Non-Recurring Closing Costs are:                                             Recurring Closing Costs are:

Lender Origination Fees                                                                    Prepaid Interest              

Appraisal                                                                                                  Prorated/Prepaid Property Taxes

Credit Report                                                                                         Fire/Hazard Insurance

Tax Service                                                                                              Up-Front Mortgage Insurance

Title Insurance Premium & Fees                                                    Prorated Home Owner Association Dues

Escrow Fees

Recording Fees

Realtor Commissions

Lenders have allowed agents and sellers to provide credit towards the buyers’ closing costs. There used to be a rule of thumb if a buyer put down 20% toward the mortgage than the credit would be limited to 6% or the actual closing costs of the purchase price. IF the buyer was putting less than 20% down than the rule used to be that the Credit was limited to the actual closing costs or 3% of the purchase price.

Previously credits were limited to the Non-recurring closing costs only. Now most lenders have loosened this requirement to both Non-Recurring and Recurring Closing Costs. This will again help first time buyers who are on the border of having enough money to put down for a home, but not enough to handle the additional closing costs. Hope this clears it up, should you have additional questions please get in touch with me, or ask away in the comments.

where does the money go?

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 email me at or visit one of my websites at Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.





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