Tag Archives: closing costs

Everything You Need to Know About Closing Costs

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Key Takeaway:

  • Closing costs are a part of every real estate sale
  • There are many variables that determine the price of closing costs
  • Ask your local real estate expert for specifics about closing costs

When you’re buying or selling a home, it’s important to understand what closing costs entail. Closing costs are expenses and fees that need to be reconciled before the sale can be finalized. These costs typically include appraisal fees, survey fees, title costs, credit report fees, loan origination fees, underwriting costs, recording fees, and taxes. However, the specific costs may vary depending on your region and the terms of your contract. As your real estate professionals, we can provide you with a detailed breakdown of what will be included in your closing costs based on your specific situation.

How Much Are Closing Costs?

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The amount you’ll pay in closing costs can vary depending on factors such as the price of the home and the type of loan you’re using. On average, you can expect to pay around 2% to 5% of the purchase price of your new home. However, it’s important to note that there are options for assistance. You may be eligible for homebuyer assistance programs or closing costs and down payment assistance from the U.S. Department of Housing and Urban Development (HUD). These programs can provide grants that do not need to be repaid or loans with manageable repayment plans. We can provide you with information about these programs and help you explore your options.

Who Pays Closing Costs?

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It’s important to note that closing costs are not solely the responsibility of buyers. Sellers may also have their own costs to cover, such as broker’s commissions, outstanding HOA fees, and property taxes. However, these costs can be negotiated, and we can guide you through the process of determining who pays what in the final contract.

Learn More About Closing Costs

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As your real estate professionals, we’re here to make the home buying or selling process as smooth as possible. We’re available to answer your questions, provide expert guidance, and ensure that you understand all aspects of the closing costs. If you’re ready to buy or sell a home, or if you have any questions about closing costs, please don’t hesitate to reach out to us. We’re here to help you achieve your real estate goals!

Saving up for a New Home? Here Are All the Costs You Need to Know

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Once you’ve found the perfect home and secured the loan, all that’s left to do is start chipping away at those mortgage payments…right? In actuality, there are a handful of other, often-overlooked expenses that come with buying a home, but as long as you know what you’re getting into, they’re plenty manageable.

Take a look at our comprehensive list of all the costs of buying a home.

One-Time Payments & Closing Costs

A person holding up keys to a house.

Closing Costs

For buyers, closing costs are typically low and range from 2-5% of your purchase price. A lot of these costs are one-time expenses, and totals can vary from state-to-state.

If you want a better idea of what closing costs could be for you, check out this helpful guide on the average payments for each state.

Miscellaneous Fees

There are quite a bit of one-time fees bundled into your closing costs, but most of them are pretty inexpensive. Some of the most common expenses include the home inspection, appraisal, credit report, deed recording, land survey, notary fees, title insurance, and document prep fees.

Recurring Payments

A woman and a child counting coins.

Mortgage Payments

Mortgage payments are the most obvious cost when buying a home. These are your predictable, monthly payments decided by both the final price of your home and your down payment—in addition to a few other bundled costs. A larger down payment means a smaller mortgage payment, and it’s a good idea to pay this off quickly, since it will accumulate interest.

Property Taxes

Property tax payments don’t go towards just one thing—they actually cover quite a bit, like road construction, community maintenance, public works, and local government salaries. The exact amount you’ll pay in property tax is calculated by the county based on your home’s value, and the rates tend to rise and fall over time. Many buyers pay their property taxes through an escrow account set up by the lender.

Homeowner’s Insurance

It’s better to have insurance and not need it than need insurance and not have it, so homeowner’s insurance is pretty crucial to home owning. While it’s almost always required when you get a mortgage and then bundled into your monthly payments, be sure to double-check that you’re covered.

Private Mortgage Insurance

If you can’t afford a 20% down payment on your home, you’ll have to pay PMI as a way to ensure that the lender won’t go under if you default on your loan. You don’t have to pay PMI forever—it ends once you pay off 78% or more of the principal amount—but until then, expect to pay up to 2% of your loan amount annually.

HOA Fees

Moving to a neighborhood with an HOA? Your dues can range anywhere from under a hundred dollars to over a thousand, but they come with perks like landscaping and exterior maintenance, and some even include added benefits like swimming pools and fitness centers. Not all neighborhoods have an HOA, but your agent can tell you what your payments will be if yours does.

Utilities

Lastly, utility fees can come as a surprise to new homeowners who are used to renting. Depending on the size of your home, you can expect to pay a few hundred dollars per month for water, electricity, heating and cooling, and trash services. If you’re curious what your utility bills might look like, just ask your agent, and they can likely secure a few statements from the past owners.

Ready to Make an Offer?

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When it comes to buying a home, the most important thing you can do is be prepared. While there are a handful of costs to keep in mind, the satisfaction of calling a place your own is well-worth it in the end.

Are you ready to get started on your home-buying journey? With years of professional and local experience, our team knows all about navigating the expenses that come with buying. Give us a call today at (540) 388-2541 to get a better idea of your costs, and let’s get started!