Have You Budgeted for Closing Costs?

Dated: 12/09/2019

Views: 14

Saving for a down payment is a key step in the homebuying process, and it’s not the only piece you need to include in your budget. Another factor that’s important to plan for is the closing costs required to obtain a mortgage.

What Are Closing Costs?

According to Trulia,

When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.”

For those who buy a $250,000 home, for example, that amount could be between $5,000 and $12,500 in closing fees. Keep in mind, if you’re in the market for a home above this price range, your costs could be significantly greater. As mentioned before,

Closing costs are typically between 2% and 5% of your purchase price.

 Trulia gives more great advice, saying,

“There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is 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.”

Bottom Line

Reach out to your lender and a local real estate professional to discuss the homebuying process, to be sure your plan includes budgeting for what you need to purchase your dream home – without any surprises!

Blog author image

Shelly Morgan

I don’t want a commission; I want to be your Realtor for life. I want to earn the right for you to refer me to everyone you know. I want to understand your goals and get you what you want. I am a pr....

Latest Blog Posts

2020 Color of The Year

Drum roll please – Pantone has chosen Classic Blue as their color of the year. Over the past couple years, bold colors on walls has become common place in designer magazines and new model.

Read More

Why You Shouldn't For Sale By Owner

Rising home prices coupled with the current inventory in today’s market may cause some homeowners to consider selling their homes on their own (known in the industry as a For Sale By)

Read More

5,300 Reasons to be Happy You're a Homeowner

Studies have shown that, in many cases, the largest asset a family owns is the house they live in. Over the last twelve months, that asset has gained substantial value.CoreLogic just released

Read More

Renting VS. Buying

Buying vs Renting? What is Better For You? Home ownership is the American Dream, right? Owing a place to call home, being able to paint the walls purple if you like, that’s what everyone.

Read More