Have You Budgeted for Closing Costs?
Saving for a down payment is a key step in the home buying 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?
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 $4,000 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.
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.
Reach out to your mortgage lender and your Accord Realty real estate agent today to discuss the home buying process, to be sure your plan includes budgeting for what you need to purchase your dream home – without any surprises!
Read more about Accord Realty's 8 step Buying process here!