As a future homeowner, you know all about a down payment and how it works, but do you understand your closing costs?
What Are Closing Costs?
Closing costs are the accumulated expenses outside of the actual purchase of a home. These can be an assortment of property taxes, title insurance, appraisal fees, escrow costs, and more. The number of closing costs depends on the type of loan selected.
Closing Cost Calculation
When you buy a home, your closing costs will generally be somewhere between 2-5% of the purchase price, though this varies depending on your loan, lender, and state. Your fees will also influence your closing costs, some of which are listed below.
- Application fee
- Home inspection fee
- Homeowners’ insurance
- Escrow fee
- Origination/Underwriting fees
Again, your fees will vary, so be sure you look into which fees apply to your mortgage. These should be found in your Closing Disclosure, which you will receive approximately three days before closing.
If you’re looking for ways to calculate possible loan amounts and learn more before your Closing Disclosure arrives, visit HERE to help point you in the right direction: