I’m a huge fan of being painfully transparent with people, so I want you to be fully aware of how much your closing costs may be before you even begin your home purchase or sale process. If you factor these numbers into your calculations then there should be no surprises at closing.
What Are Closing Costs?
By the time you reach the closing table you may realize that there are quite a few different organizations involved in the process of buying and selling a home. Between appraisals, attorneys, title insurance, etc. they can add up! The specific fees you pay depend on the type of loan involved, the home’s value, and the property involved. Here are a few common fees included in your closing costs:
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- Application Fee
- Appraisal
- Attorney Fee
- Closing Fee or Escrow Fee
- Courier Fee
- Credit Report
- Escrow Deposit for Property Taxes & Mortgage Insurance
- FHA Up-Front Mortgage Insurance Premium (UPMIP)
- Flood Determination or Life of Loan Coverage
- Home Inspection
- Home Owners Association Transfer Fees
- Homeowners’ Insurance
- Lead-Based Paint Inspection
- Loan Discount Points
- Origination Fee
- Pest Inspection
- Prepaid Interest
- Private Mortgage Insurance (PMI)
- Property Tax
- Real Estate Agent Fee
- Rate Lock Fee
- Recording Fees
- Survey Fee
- Title Company Title Search or Exam Fee
- Title Insurance
- Transfer Taxes
- Underwriting Fee
- VA Funding Fee
Buyers and sellers are subject to different closing costs, but the buyer pays the majority of the costs. Who pays closing costs can sometimes be negotiated during the offer process.
How Much are Closing Costs?
In general, expect to pay 3-6% of your total purchase price in closing fees. For example if your purchase price is $250,000 expect to pay between $7,500 - $15,000 in closing costs. The lender you choose is required to outline your closing costs in the loan estimate you receive when you first apply for the loan. You will also see a summary of these charges in the closing disclosure you receive in the days before a settlement.
In an effort to provide the most transparent information possible I’ll be sure you remain aware of common fees during the hunt for your dream home or sale of your house. Contact me today & I’d be happy to walk you through the process.
