You are about to go on one of the greatest adventures of your life. You’ll meet new people, experience new situations, and learn new real estate terms. One of the terms you’ll hear often during the home buying process is closing costs, but what exactly does this mean for you?
The sum of all the fees and expenses associated with the home buying process is referred to as the closing costs. The closing costs are paid on closing day. You can expect to pay between two and eight percent of the price of the home for these costs. You’ll need to have cash in pocket to cover these costs, unless an agreement is reached between you and the seller that says otherwise. Closing costs are not determined by just one person because of all the professionals involved in providing services needed during the home buying process.
Once you begin the process of purchasing a home, the mortgage lender provides you with an estimated list of the closing costs. This is not a comprehensive list, and you can expect the amount to increase substantially by closing day. The lender provides you with an itemized list of fees that is accurate just before closing day. Set up a time with your real estate agent to go over these fees. Check for errors and over-charges. Report these immediately. Remember, if things aren’t lining up correctly, you can seek a mortgage loan with another lender.
We’re including a list of possible fees that may be a part of your final itemized list of closing costs. This list gives you a good idea of what you can expect, but there may be other charges included that are not listed here.
- Credit Report – The lender will check to see if you are credit worthy by going over your credit report. There are times when the lender covers this fee, but you could see it on the list.
- Origination Fee – It may sound vague, but it covers the labor and paperwork fees that are associated with loan processing.
- Attorney Fees – The attorney that represents you will have fees for tasks they complete. This fee could include their time and separate charges for specific jobs completed.
- Title Search – A thorough check is done to check for liens and any other problems that could crop up in regards to the title and the property. This fee may be included in the attorney fees or listed separately.
- Title Insurance – This insurance is secured as protection in case the title search uncovers something negative.
- Survey Fees – There are times when it’s necessary to order a survey by a professional to make sure the property size and bothers are correct on the paperwork.
- Appraisal Fee – The professional appraiser is called in to make sure the property is valued correctly.
- Real Estate Agent or Brokerage Commission – This fee is typically a percentage of the cost of the home. This amount is decided before you proceed with the home buying process.
- Inspection Fees – Inspections are completed to check for everything from structural integrity to insect problems.
Plan and save more money for closing costs than you expect to need. Being well prepared will save you from being frustrated and stressed as closing day approaches.
The best source of information about local communities and real estate topics is your real estate agent. Give Brianna Ruelas a call today, for Grand Rapids call 616-272-9198 or Phoenix call 480-500-9395 to learn more about the area, to discuss selling your house, or tour available homes for sale.