Home Buyer Closing Costs are important to plan and budget. They are the expenses you’ll encounter when you purchase a home. While most people understand the need to save for a down payment, a recent survey found 41% of homebuyers surprised by their closing costs. Below is information to help. Don’t get caught off guard when it’s time to close on your home. Let’s Talk Today Contact Us
Home Buyer Closing Costs?
One reason some people are surprised by closing costs may be because they don’t know what they are or what they cover. According to U.S. News and World Report:
“Closing costs encompass a variety of expenses above your property’s purchase price. They include things like lender fees, title insurance, government processing fees, upfront tax payments and homeowners insurance.”
In other words, closing costs are a collection of fees and payments made to a variety of individuals and organizations involved in your transaction. While they can vary by location and situation, closing costs typically include:
- Government recording costs
- Appraisal fees
- Credit report fees
- Lender origination fees
- Title services
- Tax service fees
- Survey fees
- Attorney fees
- Underwriting Fees
How To Budget for Home Buyer Closing Costs?
Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical to your homebuying goals. The best source is your mortgage loan officer. But, the costs to close can be between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to cover your closing costs.
Let’s say you find a home you want to purchase for the median price of $350,300. Based on the 2-5% , your closing fees could be between roughly $7,000 and $17,500.
Keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower. MB Realty recommends to consult with a mortgage loan officer and get pre-approved.
Freddie Mac provides great advice for homebuyers, saying:
“As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”
To understand what you’ll need at closing work with a team of trusted real estate professionals such as MB Realty in Memphis TN. A Memphis Realtor can help connect you with a proven lender, and together they can provide you with answers to the questions you might have.
Bottom Line
In today’s real estate market, it’s more important than ever to make sure your budget includes any fees and payments due at closing. Let’s Talk! so you have the knowledge you need to be confident going into the homebuying process.