Why is it important to review closing costs before a mortgage transaction?

Reviewing closing costs before a mortgage transaction is crucial as it allows borrowers to understand all fees associated with the loan and ensure that they have the necessary funds available at closing. Closing costs can include various expenses such as loan origination fees, appraisal fees, title insurance, and recording fees, among others. By thoroughly reviewing these costs, borrowers can budget accordingly and avoid surprises on closing day.

Understanding the closing costs is also essential for comparing mortgage offers from different lenders. This can empower borrowers to make informed decisions based on a clear picture of what they will owe at closing. Additionally, knowing these details in advance helps facilitate a smoother closing process, as it helps ensure that all required funds are prepared and that there are no last-minute adjustments that could hinder the transaction.

The other options do not accurately reflect the primary purpose of reviewing closing costs. For example, negotiating lower property taxes typically occurs separately from the mortgage process and involves different mechanisms. Eliminating the need for a real estate agent is not related to the review of closing costs; agents often provide valuable guidance and negotiation support. Lastly, while understanding closing costs may aid in the overall process, it does not simplify the mortgage application process itself.