Do You Have Enough Set Aside For Closing Cost

Dated: 10/05/2016

Views: 99

Have You Put Aside Enough for Closing Costs? | Real Estate with Have You Put Aside Enough for Closing Costs? - Simplifying the Market™
There are many potential home buyers, and even sellers, who believe that you need at least a 20% down payment in order to buy a home, or move on to their next home. Time after time, we have dispelled this myth by showing that there are many loan programs that allow you to put down as little as 3% (or 0% with a VA loan).

If you have saved up your down payment and are ready to start your home search, one other piece of the puzzle is to make sure that you have saved enough for your closing costs.

Freddie Mac defines closing costs as:

“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage.  These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

We’ve recently heard from many first-time homebuyers that they wished that someone had let them know that closing costs could be so high. If you think about it, with a low down payment program, your closing costs could equal the amount that you saved for your down payment.

Here is a list of just some of the fees/costs that may be included in your closing costs, depending on where the home you wish to purchase is located:

  • Government recording costs

  • Appraisal fees

  • Credit report fees

  • Lender origination fees

  • Title services (insurance, search fees)

  • Tax service fees

  • Survey fees

  • Attorney fees

  • Underwriting fees

Is there any way to avoid paying closing costs?

Work with your lender and real estate agent to see if there are any ways to decrease or defer your closing costs. There are no-closing mortgages available, but they end up costing you more in the end with a higher interest rate, or by wrapping the closing costs into the total cost of the mortgage (meaning you’ll end up paying interest on your closing costs).

Home buyers can also negotiate with the seller over who pays these fees. Sometimes the seller will agree to assume the buyer’s closing fees in order to get the deal finalized.

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

Marvette Cofield

You don’t choose a home because you love the paint color. No, an investment this big demands in-depth knowledge so that you can buy with confidence. That’s where I come in. As an agent with Berk....

Latest Blog Posts

NEW LISTING ALERT

72 Village Grove Rd;Colonial located on 1/3 acre in a culdesac with fully finished back yard. This home offers 4 spacious bedrooms, large eat in kitchen, over looking family room and gas Fireplace

Read More

Check Out These 129 Homes In Stafford That Were Just Reduced

Looking for a good deal, or want to make sure you get an edge on your competition? Make sure to register  for The Acors Team's Buyer Advantage Program and get the most up to date information on

Read More

Confidence In Real Estate Market Rises Interest Rate Concerns Remain In Berkshire Hathaway HomeServi

Optimism toward the U.S. economy and real estate market rose across all generations of current and prospective homeowners in Berkshire Hathaway HomeServices’ latest Homeowner Sentiment Survey

Read More

Comprehensive List Of The 65 New Listings To Hit The Fredericksburg Market This Week

This week there were 65 New Listings to hit the market with the most expensive home listed just shy of $1.2 million on Lake Anna. The home boasts 5 Bedrooms and 3 Baths, a chefs kitchen, boat house

Read More