“Here’s some helpful information on what those costs are and how much you should budget for them.”
Before making the decision to buy a home, it’s important to plan for all the costs you’ll be responsible for. While you’re busy saving for the down payment, don’t forget you’ll want to prep for closing costs too.
Here’s some helpful information on what those costs are and how much you should budget for them.
What Are Closing Costs?
A recent article from Bankrate explains:
“Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”
Simply put, your closing costs are the additional fees and payments you have to make at closing. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:
- Government recording costs
- Appraisal fees
- Credit report fees
- Lender origination fees
- Title services
- Tax service fees
- Survey fees
- Attorney fees
- Underwriting Fees
How Much Are Closing Costs?
According to the same Freddie Mac article mentioned above, they’re typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to budget.
Let’s say you find a home you want to purchase at today’s median price of $384,500. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,690 and $19,225.
But keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.
Make Sure You’re Prepared To Close
Freddie Mac provides great advice for homebuyers, saying:
“As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”
The best way to do that is by partnering with a team of trusted real estate professionals. That gives you a group of experts to help you understand how much you’ll need to save and what you’ll want to be prepped for. It also means you have go-to resources for any questions that pop up along the way.
Bottom Line
Planning for the fees and payments you’ll need to cover when you’re closing on your home is important. Partnering with a local real estate professional can give you the guidance and confidence you need throughout the process.
To view original article, visit Keeping Current Matters.
Saving for a Down Payment? Here’s What You Need To Know.
One of the biggest misconceptions among housing consumers is what the typical down payment is.
Why Buying or Selling a Home Helps the Economy and Your Community
If you’re thinking about buying or selling a house, it’s important to know that it doesn’t just affect your life, but also your community.
Your Needs Matter More Than Today’s Mortgage Rates
If you’re thinking about selling your house right now, chances are it’s because something in your life has changed.
Are Home Prices Going Up or Down? That Depends…
We’re about to enter a few months when home prices could possibly be lower than they were the same month last year.
This Real Estate Market Is the Strongest of Our Lifetime
This is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime.
Real Estate Is Still Considered the Best Long-Term Investment
Real estate was voted the best long-term investment for the 11th consecutive year, beating gold, stocks, and bonds.