….so what’s your bottom line?
Closing costs are big part of buying or selling a home. Each side of the transaction has its own set of costs, so it’s very important to know what they are in order to make a calculated estimate as to how much money you’re going to make from the sale of your home or how much money you need to purchase your dream home.
Buying a Home:
Aside from your down payment, closing costs are fees associated with your home purchase and home loan typically payable at or before the closing. The amount you’ll spend on closing costs can be a surprising aspect of buying a home if you aren’t prepared. They can affect your budget, so it’s a good idea to know what they are before making an offer on a home.
So just how much are closing costs? As a rule of thumb, closing costs to buy a home can run between 2 and 5 percent of the purchase price. The wide range varies depending on where you live, the price of the property you purchase and the type of loan you choose. The following is a list of common closing costs. You may not see all of them in your transaction and/or there may be additional fees not reflected below, but this list covers the vast majority of the types of fees you can expect. Always check with your lender and closing agency you’re working with prior to your closing to confirm exactly how much your closing costs will be.
- Loan Application Fee
- Appraisal Fee (sometimes payable prior to closing)
- Attorney Fee
- Escrow Fee
- Courier Fee
- Credit Report Fee
- Escrow Deposit for Property Taxes
- FHA Up-Front Mortgage Insurance Premium if you have an FHA loan
- Flood Determination or Life of Loan Coverage
- Home Inspection (generally payable prior to closing)
- Homeowners Insurance
- Lender’s Policy Title Insurance
- Lead-Based Paint Inspection
- Loan Discount Points
- Owner’s Policy Title Insurance
- Loan Origination Fee
- Pest Inspection (sometimes payable prior to closing)
- Prepaid Interest
- Private Mortgage Insurance (PMI)
- Property Tax Escrow
- Recording Fees
- Survey Fee
- Title Company Title Search Fee
- Transfer Taxes
- Underwriting Fee
- VA Funding Fee (if you have a VA loan)
- Pro-Rated Property Taxes (based on the closing date)
Selling a Home:
It’s important to have a basic understanding of the costs associated with selling your home as well. Knowing these costs will allow you to come up with an accurate estimate of how much you will actually make from the sale of your home. Here is a list of costs you may need to account for:
- Mortgage Balance(s) (call your lender for the payoff)
- Realtor Commission
- Buyer Closing Costs Paid for by the Seller
- Outstanding HOA Dues or Assessments
- Pro-Rated Property Taxes (based on your closing date)
- Title or Attorney Closing/Settlement Fees (contact the closing agent for this figure)
- Pre-Paid Home Warranty for the Buyer
- Outstanding Invoices to Contractors for Repairs
- Outstanding Liens or Judgments Attached to Your Home
Our expert staff is always available to answer any questions related to closing costs from buying our selling a home. Before making a decision on whether or make or accept an offer, we can help you put together a preliminary “net sheet” that will give a solid estimate as to what your closing costs will be.
