Common Costs to expect at Closing
At closing, buyers will have to come up with additional cash to meet the expenses of buying a home.
Below are some common closing costs.
Down Payment. Most buyers will need to put down at least 20 percent. This makes good financial sense. You will not only lower your monthly mortgage statement but have more equity in your home off the bat.Loan Origination This is what the lender charges you to prepare the loan especially what they charge for their time and paperwork.
Points. Lenders differ in mortgage rates and in the points they charge. By paying points you can receive a lower interest rate but this means paying more cash at closing.
Appraisal. This is what the lender requests to make sure the purchase price of the home meets an equivalent value. You don’t want to pay more for a home than it is worth.
Home Inspection. Whatever the age of the property, get a home inspection by a qualified inspector. It’s best to discover any problems that may need attention and address them during the discovery period. A home inspection will run you about $300 to $500.
Private Mortgage Insurance (PMI). This is what a lender charges if you are putting less than 20 percent down on the cost of the home. It usually runs about .5 to 1 percent of the total cost of the loan and protects the lender should you default.
Other Small Fees Insurance escrow, property tax escrow, notary feeds, land surveys, deed recording, etc. Buyers pay their fair share of escrow fees and sellers pay their fair share.
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