Budgeting for closing costs is important.
The Lawhead Team would like to share the latest One Cool Thing about closing costs and what you need to know to plan for them when buying a home.
Closing costs make up anywhere from 2-5% of the home’s purchase price. It’s critical that buyers budget for closing costs to avoid sticker shock days before closing.
Below are the different fees included with closing costs:
- Origination Fees: A fee charged by the lenders for processing the application and underwriting it. This fee typically ranges from 0.5%-1% of the borrowers mortgage.
- Service Charges: Includes the appraisal, credit report, flood determination and certificate, tax status, pest inspection, title search and insurance, and survey fees. Appraisals and surveys can cost anywhere between $300 to $500 each. Title services can add up to about $2,000.
- Transfer Taxes And Recording Fees: Vary by state but can run as high as 2.7% in some states.
- Escrow Items: Includes homeowners’ insurance, property taxes, and primary mortgage insurance, if applicable. These vary by location. HOA fees also may be included here.
Source: NATIONAL ASSOCIATION OF REALTORS Economists’ Outlook
