How do Closing Costs Work?

Closing Costs are the fees that pay for the various services involved when you sell or buy real estate.

Many of the costs associated with a commercial mortgage are related to the loan itself. Others are for appraisal, underwriting, inspections, title and escrow.

Good Faith Estimates (GFEs)

Soon after you submit your application, and after we have received enough data to complete the analysis of your property, we will provide you with the "Good Faith Estimate" of your costs. The closing costs spelled out in the Good Faith Estimate are estimated based on our experience with commercial mortgage loans, but costs often vary by small amounts between the Good Faith Estimate (GFE) and closing. We explain Good Faith Estimates with buyers every day, so we'd be glad to answer any questions you have about closing costs.

Below is a fairly general list of costs. We will provide you with a specific list of your closing costs when we deliver your Good Faith Estimate. (Ignore the PMI comment below).

Standard Closing Costs

Loan-Related Costs
  • Taxes
  • Costs associated with "originating" your loan (processing and underwriting) 
  • Points — A fee paid to lower your mortgage interest rate (sometimes optional)
  • Appraisal Fee
  • Credit Report
  • Interest Payment
  • Escrow Fees and title insurance 
Property Taxes
  • Transfer Taxes & Recording Fees
  • Insurance
Homeowners Insurance
  • Private Mortgage Insurance (PMI)
  • Title Insurance
  • Flood or Earthquake Insurance if applicable

Bay Area Capital Commercial Mortgage can answer questions about your closing costs. Call us at 650-631-1800.

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