What are Mortgage Closing Costs?
Buying a home can cause sticker shock when you consider that hundreds of thousands of dollars are on the line. Before you close, you will need to prepare yourself for another financial shocker: Closing Costs.
You have to pay closing costs whether you are buying a house or having your mortgage refinanced. It may be a bit overwhelming when you get your first look at the various costs you will have to pay when you close your loan.
However, do not stress. We have broken down what you have to pay — property taxes, mortgage insurance, title search fees and more. Closing costs will make more sense once you understand what they cover, and how they protect the biggest investment, you will likely make in your lifetime.
The total you will pay can vary greatly according to your home’s purchase price. The average homebuyer will pay between about 2% and 5% of the loan amount in closing fees.
Your lender is required to outline your closing costs in the Loan Estimate and the Closing Disclosure you receive before the big settlement day. Take the time to review them closely and ask questions about things you do not understand.
Appraisal Fee: It is important to a lender to know if the property is worth as much as the amount being borrowed. This is for two reasons: The bank needs to verify that the amount you need for a loan is justified, and the bank wants to make sure it can recoup the value of the home if you default on your loan. The average cost of a home appraisal by a certified professional appraiser ranges between $300 and $400. Check with your lender for the correct amount of the Appraisal.
Home Inspection: Most lenders require a home inspection, especially if you are getting a government-insured mortgage. Before lending you hundreds of thousands of dollars, a bank needs to make sure the home is structurally sound and in good enough shape to live in. If the inspection turns up troubling results, you may be able to negotiate a lower sale price. However, depending on how severe the problems are, you have the option to back out of your contract if you and the seller cannot come to an agreement on how to fix the issues. Home inspection fees, on average, range from $300 to $500. Check with your Home Inspector for the correct amount of the Inspection.
When buying a home in today is market, you need a market-savvy Realtor who not only has experience but who also has a team of professional Real Estate Consultants to guide you through the process of everything that needs to be done when purchasing a home. When you hire me and my team of Professional Real Estate Consultants to help you buy a home you will receive expert advice from people who are knowledgeable, experienced, and who will truly listen to your Real Estate needs. My clients say, “Susan and her team are compassionate and caring about what they do. They have helped us when no one else could.” As your trusted Real Estate Consultants, my team and I meet with you and offer you the guidance and the information you need to make every facet of your transition as smooth and comfortable as possible. As full-time Consultants, we are able to ‘work the market’ for you, keeping you up-to-date with conditions as they impact the market. Let us help you ‘Make A House Your Home.” Call/text Susan Compagner at 616.836.2603. [email protected] www.SusanCompagner.com.