What Every Homebuyer Should Know About Closing Costs
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 saving for the down payment, don’t forget to budget for closing costs as well. Here’s what you need to know.
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, closing costs are additional fees and payments required at closing. According to Freddie Mac, 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?
Freddie Mac notes that closing costs are generally between 2% and 5% of the total purchase price of your home. For example, if you purchase a home at today’s median price of $384,500, your closing costs could range from roughly $7,690 to $19,225. Homes above or below this price will adjust accordingly.
Make Sure You’re Prepared To Close
Freddie Mac recommends planning for all costs involved, from your down payment to closing fees. Partnering with a team of trusted real estate professionals ensures you have guidance on how much to save and answers to any questions along the way.
Bottom Line
Planning for closing costs is essential when buying a home. Partnering with a local real estate professional provides the confidence and guidance you need throughout the process.
