What Are Closing Costs?
You've found your dream home, the seller has accepted your offer, your loan has been approved and you're eager to move into your new home.
But before you get the key, there's one more step called the closing. Also called the settlement, the closing is the process of passing ownership of a property from the seller to the buyer.
As a buyer, you will sign what seems like endless piles of documents and will have to present a sizable check for the down payment and various closing costs.
Many of the fees may vary by locality, here are some common fees:
- Appraisal Fee: This fee pays for the appraisal of the property. You may or may not have to pay this fee at the beginning of your loan application process.
- Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.You may or may not have to pay this fee.
- Title Insurance Fees: These fees generally include costs for the title, registration, search & title insurance(if needed).
- PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance. This is usually included in the mortgage amount. Check with your lender to be sure.
- Property Taxes Fee(prorated): This fee covers the taxes from the date you purchase the home to the end of the year. Generally, if you buy a home early in the year, the fee will be substantially higher since you are paying until the end of the year.
If you have questions or are ready to begin the home buying process, just complete the form below, and a member of our team will be in touch shortly!
Are you a first-time homebuyer? Did you know that if you haven’t owned a property in the last three years that you are considered a first-time homebuyer?View Resources
Before the offer to purchase is created, you must be at least pre-qualified or, better yet, pre-approved by a lender, unless you are paying cash.View Resources
Once your offer is accepted by the seller it starts the offer accepted period. You will be asked for a down payment, typically 1% of the purchase price, on the home you are purchasing which will be held with an attorney or settlement company and applied to the final purchase of your property.View Resources
Complete the form below and we'll create you a custom property search. Anytime when we find properties that match your specific criteria we’ll send you an email.View Resources
Are you thinking about buying? The video resources below cover many of the common questions that most people have during the home buying journey.View Resources