When purchasing a home, you pay more than just the cost of the home itself. Closing costs must also be factored into your home buying budget. Closing costs vary significantly between lenders and locations. It’s important to talk to multiple lenders to decide who gives you the best value. Here are a few things you can expect with closing costs and how much you can expect to pay.
Closing costs are the fees paid at the closing of a real estate transaction through a negotiation between the buyer and seller. While some closing fees are not negotiable, such as the brokerage sales commission, which is paid for by the seller, and the appraisal fees, which are dictated by the bank, most other closing costs are negotiable.
What charges go into your total closing costs?
With this competitive market, some lenders may offer discounts or eliminate certain fees but the general fees included in the closing costs are about the same. Below is a list of some of the closing costs you may incur.
- Title Insurance: A substantial amount of closing costs include title insurance and title services charges. The average cost for title insurance and third party services is $2,159.
- Attorney fees
- Loan origination fee: Lenders may charge this for processing the loan paperwork for you.
- Underwriting fee: The cost of evaluating a mortgage loan application.
- Charges for any inspection required or requested by you or the lender.
- Escrow deposit: May pay for a couple months' property taxes and private mortgage insurance.
- Pest inspection fee: Conducted for the Wood Destroying Organisms and must be done within 30 days of closing a sale on a home
How much will you pay in closing costs?
Roughly, closing costs are between 2-5% of the cost of your new home. Lenders are required by law to give you a good faith estimate (GFE) of what the closing costs on your home will be within 72 hours of when you apply for a loan.
For those prospective buyers who would rather avoid dealing with closing costs, Lennar homes is eliminating closing costs and asking for no down payment for a limited time. You’ll also pay no HOA fees for the six months! To learn more about this incredible offer visit LennarPresents.com.