A Quick Guide To Closing Costs

Closing costs are the fees you’ll pay when buying or selling a property. If you’re looking to buy a property in Homewood or Albertville, your lender will typically require that you cover these fees upfront as part of the mortgage application process. 

The closing costs for buyers vary, but it’s usually advised that homeowners prepare for fees costing an additional 2-5% of the purchase price. When it comes time to sell, homeowners are responsible for paying all of the necessary closing costs associated with their home sale from start to finish. Property sales and purchases require a number of highly skilled professionals, and this is reflected in the closing costs you will be expected to pay on your property in Homewood or Albertville. 

What Do Closing Costs Include?

closing costs

Closing fees pay for a wide range of services that have been involved in the selling or purchase process. You will have to pay for your attorney, there will be taxes to consider and you may also need to pay a commission to the realtor. Some of these fees, such as document fees or administration charges, will only be a small amount that you can easily cover. If you have requested surveys, inspections, or extra reports on the property, these may also increase the closing costs you will have to pay. 

If you’re buying or selling a property in Homewood, your closing fees could include brokerage commission fees, attorney fees, realty transfer taxes, recording fees, inspection fees, warranty fees, title service fees, document stamps, document taxes, mortgage application points, and appraisal fees. You may not have to pay all of these, but the costs can add up quickly, so it’s important to budget for higher fees so you’re not left short.

How Much Are Closing Costs? 

Closing costs vary depending on the price of your property, your mortgage agreement, and what surveys or inspections are taken out, but in general, it’s around 2-5% of the purchase price. The good news is that when buying a home, your lender will typically require you to cover these fees upfront as part of the mortgage application process so you know you can afford them. 

When selling a home, these costs can be paid in cash or financed as part of the purchase. After you have submitted your mortgage or loan application, your lender should provide a “good faith estimate” of what your closing costs might be so you can adequately budget and save for them. 

How Do You Pay Closing Costs?

If you have enough in savings to cover your closing costs, you can pay the fees via bank transfer or through another cash payment method. If you can’t pay cash or would prefer not to, you can also use your home as collateral for the loan by taking out a mortgage. It’s important to make sure you have enough to cover the highest estimate of your closing costs in Homewood, just in case any unexpected fees crop up as part of the process.