One of the many questions that first time home buyers ask is what exactly are closing costs and how much will they cost me out of pocket? Closing costs can vary and they are based on the property that you are looking to buy and additionally where the property is located.
Some of the closing costs when purchasing a home include:
· A fee for running your credit report.
· A loan origination fee, which lenders charge for processing the loan.
· Attorney’s fees.
· Discount points, which are fees you may pay in exchange for a lower interest rate.
· Survey or mortgage inspection fee, which a lender requires to the verify property lines and compliance with the town.
· Title search fees, which pay for a background check on the title to make sure the title is free and clear of things such as unpaid mortgages or tax liens on the property.
· Lender's and owner's title insurance, which protects the lender in case there is a title defect that the search may have missed.
· Escrow deposit, which pays for property taxes and private mortgage insurance in advance.
· Recording fee, which is paid to a city or county in exchange for recording the new land records.
Closing costs range depending on the purchase price and taxes and insurance. So, for an example if you are purchasing a home that cost $150,000, closing costs may be $3,500 in one town but in a more expensive town it could be close to $5,000. Often, many of the fees that make up closing costs home buyers can negotiate with the seller of the home over who pays these fees.
As always, if you have any other questions concerning closing costs or the home buying experience please let us know! Have a great day!
As a mortgage lender, I take pride in helping all of my clients through the home buying and refinancing process. As a former real estate agent, I know all aspects of a real estate transaction and do everything to ensure my clients close on time and with the best rate possible.