What Every Homebuyer Should Know About Closing Costs

Before making the decision to buy a home, it's important to plan for all the costs youll be responsible for. While you're busy saving for the down payment, don't forget youll want to prep for closing costs too.

Heres some helpful information on what those costs are and how much you should budget for them.

What Are Closing Costs?

A recent article from Bankrate explains:

Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how its being financed . . .

Simply put, your closing costs are the additional fees and payments you have to make at closing. According to Freddie Mac, 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 Much Are Closing Costs?

According to the same Freddie Mac article mentioned above, theyre typically between 2% and 5% of the total purchase price of your home. With that in mind, heres how you can get an idea of what youll need to budget.

Lets say you find a home you want to purchase at todays median price of $384,500. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,690 and $19,225.

But keep in mind, if youre in the market for a home above or below this price range, your closing costs will be higher or lower.

Make Sure Youre Prepared To Close

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.

The best way to do that is by partnering with a team of trusted real estate professionals. That gives you a group of experts to help you understand how much youll need to save and what youll want to be prepped for. It also means you have go-to resources for any questions that pop up along the way.

Bottom Line

Planning for the fees and payments you'll need to cover when you're closing on your home is important. Partnering with a local real estate professional can give you the guidance and confidence you need throughout the process.

Venessa James - Broker Associate    

ABR, ALHS, CHMS, MCNE, LUXE, SFR, SRS  

Platinum Experience Group - KW Professionals 

(281) 889-8292 platinumexperiencegroup.com

Integrity, Experience, Results