Closing Costs – Home Affordability

As soon as you decide you want to buy a home, itโ€™s a good idea to start stashing away cash. In addition to your down payment, youโ€™ll have to account for closing costs. Closing costs can range between 2 percent and 5 percent of the homeโ€™s total sale price.

What Charges Are Included in Your Closing Costs?

Most people donโ€™t know exactly what theyโ€™re being charged for when it comes to closing costs. While every transaction is different, closing costs typically include things such as:

  • A loan origination fee (the cost of processing your loan paperwork)
  • Attorneyโ€™s fees
  • The fee for pulling your credit report
  • Charges for inspections
  • Discount points (if you have chosen to pay fees in exchange for a lower interest rate)
  • A survey fee
  • An appraisal fee
  • Title insurance
  • Title search fees
  • Escrow deposit
  • A recording fee
  • An underwriting fee

How Much Will My Closing Costs Be?

Because closing costs are generally between 2 percent and 5 percent of the homeโ€™s purchase price, your closing costs will vary.

If your home cost $200,000, for example, you could pay between $4,000 and $10,000 in closing costs.

Within a day of closing, your lender will give you a HUD-1 statement. The HUD-1 statement outlines your closing costs. Youโ€™ll compare that to your good faith estimateโ€”the document the lender gave you within three days of applying for your loanโ€”and make sure that the costs havenโ€™t risen more than 10 percent (thatโ€™s the maximum allowable by law).

In some cases, the fees that go into your closing costs are negotiable. If some things seem exorbitant, ask your lender to remove them; you can always find another lender willing to work with you if your current lender wonโ€™t budge.

Most people plan for closing costs while theyโ€™re saving for a down payment. (Not sure how much you need? Read โ€œHow Much Do I Have to Save to Buy a Home?โ€.)

Ready to Find the Perfect Main Line Home?

Call us at (610) 608-3119. Weโ€™d love to help you find the perfect space in a Main Line neighborhood that you love.

 

Links:

Are You Ready to Buy a Home

How Much Do I Have to Save to Buy a Home

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