How do Closing Costs Work?

"Closing Costs" are the fees that pay for various services involved when you sell or buy residential real estate. Sellers & buyers usually negotiate to decide how to share these closing costs.

As indicated below, many of the buyer's closing costs cover the costs of getting the mortgage loan. Since Farm Credit of the Virginias has extensive experience with mortgages and closings, we can help you understand your closing costs.

Loan Estimate (Also known as the LE)

Soon after you apply for a loan, we'll give you the "Loan Estimate" of your costs. We base this closing cost estimate on our many years of past experience. It's important to note that while our LEs are very accurate, we can't always estimate costs to the penny. We field questions about closing costs every day at Farm Credit of the Virginias, so please be sure to ask if you have questions.

We've provided a general list of these costs below, but we will provide you a specific list of closing costs, with amounts, very soon after you have completed your loan application. At Farm Credit of the Virginias, we don't believe in surprises, so if your costs change, we will be sure to let you know immediately.

Standard Closing Costs

Loan-Related Costs
  • Costs related to "originating" your loan
  • Points — These are costs you pay up-front to lower your mortgage interest rate (optional)
  • Appraisal Fee
  • Credit Report
  • Interest Payment
  • Escrow Fees
  • Various Taxes
Property Taxes
  • Insurance
  • Transfer Taxes and Recording Fees
Homeowners Insurance
  • Flood or Earthquake Insurance
  • Private Mortgage Insurance (PMI)
  • Title Insurance

Farm Credit of the Virginias can answer questions about these closing costs. Call us at (800) 919-3276.

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