I hear about “closing” costs and “pre-paids”. What are these exactly?
Closing costs are the actual fees involved in obtaining commercial real estate loan. Examples include, credit report, application fee, processing fee, appraisal, underwriting fees, survey and title company fees. Usually, you may be asked to pay a credit report/application fees before loan approval and all other fees after loan is approved or prio to closing. Pre-Paid fees are the fees that make up YOUR escrow account. For instance, your insurance and taxes. Pre-paid expenses may also include interest on your new loan from the day of closing till your first payment is due.
