Understanding Closing Costs: What exactly are they and how much should you budget for?
ย If you are planning on buying a home this year, it is important to plan for any fees or payments you will need to pay at the closing of the transaction, otherwise known as closing costs.ย Buying a home can be a very exciting time for you, so it is best practice to know what costs you will be responsible for at the end of the transaction. This way there are no surprises when you go to sign the final documents.ย According to Bank Rate and I quote, โClosing costs are the fees and expenses you must pay before becoming the legal owner of a house. Closing costs vary depending on the purchase price of the home and how itโs being financed.โ So, what are some closing costs as a buyer you will need to pay?ย Typically, in a transaction, this can be costs for appraisal, credit reports, lender origination fees, title, escrow, underwriting, prepaids, and notary fees. Closing Costs usually are 2-5% of the total purchase price of the home but can vary depending on the lender.ย So, for example, if you are purchasing a home for $750,000, your closing costs could be around $15,000. The good news is everything is negotiable, and you may be able to get credit from the seller to offset some of the costs.ย That is why it is important to work with an experienced real estate agent who can negotiate the best terms for you.ย If you would like more information on current market data and the available inventory in the area, reach out to us at 619-851-6028 so we can help you with your search and write the best offer for your next home.
Betty Torano, REALTORยฎ
ย DRE #01922297
619-851-6028
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