You can’t predict the future — or control the havoc that a fire, hurricane, or flood can take on your home. But, you can take steps to ensure that you’re prepared in the event you
Don’t Forget About The Closing Costs
Dated: August 31 2021
When buying a home, it’s important to have a budget and make sure you plan ahead for certain homebuying expenses. Saving for a down payment is the main cost that comes to mind for many, but budgeting for the closing costs required to get a mortgage is just as important.
Speaking of closing costs, you can typically expect to pay anywhere from 2% to 5% of the total cost of the home, and these costs can include title insurance, origination fees, underwriting fees, document preparation fees, and more.
For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater.
By working closely with your real estate agent and lender you should be able to get a good idea of how much your closing costs are going to be, and how much money wil be required from you on closing day to get you into the home you love.
The most important thing is to read the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.
As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Work with your lender and a local real estate professional to be sure you have everything you need to land your dream home.
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