How do Closing Costs Work?

"Closing Costs" are the fees that cover the various services involved in the sale of a house. Sellers & buyers often negotiate to determine who will pay different portions of these costs.

Many of the closing costs associated with buying residential real estate are associated with getting a mortgage. Since Alerus Mortgage has extensive experience with mortgages & closings, we often explain the details of closing costs.

Good Faith Estimates (GFEs)

Buyers get a "Good Faith Estimate" of closing costs at the time the loan application is submitted to the lender. The closing costs enumerated in the Good Faith Estimate are estimated based on our experience with mortgage loans, but costs often vary a little bit between the Good Faith Estimate (GFE) and closing. We go over Good Faith Estimates with buyers every day, so we are happy to answer any questions you have about closing costs.

We've provided a general list of these costs below, but we'll give you a specific list of closing costs, with amounts, soon after you complete your application. At Alerus Mortgage, we don't believe in surprises, so if your costs change, we'll be sure to let you know immediately.

Standard Closing Costs

Loan-Related Costs
  • Up-front Interest Payment
  • Escrow Account
  • Various Taxes
  • Loan Origination Fee
  • Points — A fee paid to lower your interest rate (optional)
  • Appraisal Fee
  • Credit Report
Property Taxes
  • Transfer Taxes & Recording Fees
  • Insurance
Homeowners Insurance
  • Private Mortgage Insurance (PMI)
  • Title Insurance
  • Flood / Quake Insurance

At Alerus Mortgage, we answer questions about closing costs every day. Give us a call at 952 417 8481.

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