Did You Remember to Budget for Closing Costs?

Dated: October 25 2020

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Did You Remember to Budget for Closing Costs?

Buying a home is one of the largest financial transactions most people make in a lifetime. In

addition to saving for the down payment, there are many other costs associated with buying a

home; home inspections, appraisals, and escrow fees are considered closing costs and are out

of pocket costs to both buyers and sellers. If you are financing the home, then there are

additional lender fees to consider as well.

The Basics of Closing Costs

Closing costs are typically out of pocket costs associated with buying, or selling, a home. Some

loan programs will allow you to “finance” most of these costs by adding the cost to the loan

balance, but it’s important to remember that the home must still appraise for the additional

value and not all programs allow you to do this. It’s better to plan for the extra cost which can

range from 3-7% of the home’s purchase price.

Typical Closing Costs

The full list of closing costs involved in your specific transaction while be outlined on a form

called the Good Faith Estimate (GFE). This will be provided once you have entered the

settlement/escrow period. It will disclose costs associated with concluding the transaction.

You can expect to see items related to loan fees and costs, appraisal, title insurance and

transfer fees, processing and recording fees, hazard insurance, and property tax costs among

many others.

If you are considering a home purchase, it’s time to speak with a local lender to get a full

understanding of the costs associated with buying a home. In this way, you can ensure you

have saved what you need to close on your dream home.

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Susan Banks

Susan Banks Strives for excellence by serving her clients with the utmost care throughout what can be the most stressful times of buying and selling homes. She provides exceptional service by explain....

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