Ultimate Pre-Approval Cheat Sheet Part 4: Other Closing Costs and How To Help Pay For Them 

Co-Authored by Allan Salter and The Sherman Team 

Part of this series regarding pre approval is helping make you guys aware of what to expect, so we needed to talk about closing costs and escrows/prepaids.  We sat down with lender and co-author of this endeavor Allan Salter of Mac 5 Mortgage to hash out this subject, and he gave us some great insight on what closing costs and escrows were and even how you guys can use your interest rate to help pay for them.    

Closing costs and escrows/prepaids are separate costs from down payment and are collected at closing so the title company can then make sure everything gets paid or placed into an appropriate escrow account.  These all fall under closing costs and escrows/prepaids:  

Appraisal   

HOA fees  

Title work  

The underwriting of the loan  

Credit  

Any clerk and recorder fees  

The first year of your homeowners insurance   

At least a few months of property taxes and insurance  

These closing costs and escrows/prepaids can add a significant amount in addition to the down payment. But as we hinted earlier, Allan can also look at your interest rate to see if that can help pay for these closing costs.  

Going for the lowest interest rate possible is a great option, but there are options where you can look at raising the rate just a little bit in order to free up some money on the front end which can help cover the closing costs and escrows/prepaids.  We shot a video with Allan that you can watch below in which he helps explain all of this.  Our goal with this series is to help get you guys approved the best way possible and a big part of that is educating you guys about this process.  And as always if anyone has any questions, we welcome any phone calls, texts and messages.  We got Allan in front of the camera to break this down further: