Randy P has done an excellent job outlining things here. Some added thoughts:
- I very much agree with getting a loan fixed for how long you need it to save on rate. Lately, the 3, 5, 7, and 10 year fixed rates haven't been much less than a 30 year fixed, unfortunately.
- paying points can be a good thing. For example, on a 30 year fixed, if you pay 0.375 points to bring down the rate 0.125, you'll pay yourself back in roughly 3 years and have many more to actually save on interest.
- less reputable lenders will abuse the Good Faith Estimate (GFE) in a "bait and switch" kind of way. Remember, the operative word is "estimate." Many times, by the time you find out the bad news, it's too late to go to another lender.
- I wouldn't let anyone you're talking to pull your credit report, as your score will drop somewhat as a result. If you haven't gotten a free credit report in the last year, you can get all three at
www.annualcreditreport.com , a legitimate source set up by the three major bureaus. I'd suggest getting all three reports, and pay extra for the score. Make whoever you're talking to use your scores to avoid inquiries until you've chosen your lender.
- I didn't see title insurance in Randy P's list of closing costs. Owner's title insurance is probably going to be $2-3K in CA, lender's title insurance will probably be less than $1K.
- Many of the fees Randy listed are negotiable as far as who pays them, but that all factors in to the sale price ultimately. In fact, you can inflate the sale price a little and have your seller credit you all the non-recurring closing costs (NRCCs), usually up to a limit of 6% of the sales price. As long as an appraiser can bring in a slightly inflated sales price, you've effectively financed your closing costs. (Taxes and interest don't count as NRCCs).