Taking out a mortgage loan isn't free. Your lender will impose various mortgage settlement charges. And homebuyers, unless they negotiate a different arrangement with sellers, are responsible for paying these fees.
The amount of money you'll pay to close your mortgage loan will vary depending on the size of your home, your state and your lender. Financial website Bankrate.com found that at the end of June 2012, buyers closing on $200,000 mortgage loans with a down payment of 20 percent paid an average of $3,754 in mortgage settlement charges.
As the buyer, you'll pay a variety of fees at the closing table. Your lender might charge application and loan-origination fees. You'll also have to pay for title insurance, an appraisal to determine the market value of the home you are buying, possible mortgage insurance costs, points and homeowner's insurance fees. You might, depending on your lender and your location, might have to pay for a termite inspection or for flood insurance.
This doesn't mean, though, that you can't negotiate with the sellers of your home to transfer some of the costs of settling a mortgage loan to them. You might request that the sellers pay for title insurance. You might negotiate that the sellers will pay for all loan-origination or application fees. You might even negotiate as part of your offer to buy the property that the sellers cover all of the mortgage-settlement costs.
You have two choices for how to pay your settlement costs. You can either pay them in a lump sum or you can negotiate to roll the settlement costs into your monthly mortgage payment.
Don Rafner has been writing professionally since 1992, with work published in "The Washington Post," "Chicago Tribune," "Phoenix Magazine" and several trade magazines. He is also the managing editor of "Midwest Real Estate News." He specializes in writing about mortgage lending, personal finance, business and real-estate topics. He holds a Bachelor of Arts in journalism from the University of Illinois.