5 Important things you need to know about closing costs.
Great, you finally made a winning offer and it was accepted by the seller.
As a buyer, it is important to know that apart from the listed price there are other variables and additional expenses when buying a home. One of which is the closing costs. If you are a first-time homebuyer do not be blindsided with this fact.
What are closing costs?
According to Investopedia, these are expenses, over and above the price of the property that buyers and sellers, normally incur to complete a real estate transaction.
What do you need to know about closing costs?
1. You cannot avoid it.
These are mandatory fees when purchasing a new home. Closing costs may include loan origination fees, loan underwriting fee, discount points, appraisal fees, title searches, title insurance, surveys, taxes, and credit report charges.
2. It varies.
It is important to know what closing costs to pay and how much they cost. The amount may vary from city to city and would depend on the value of the property and its location.
The properties in the State of California is known to be more expensive than other states. Therefore, it is one of the ten states that have high closing costs. Read here the average closing costs in California counties.
3. Who pays what?
Closing costs may be categorized into three: (a) taxes, (b) loan origination fees, and (c) validation services fees. So, who pays what?
The taxes are paid by the buyer. It is prepaid from the time it was sold until the remainder of the year.
The loan origination fees are fees charged for securing a mortgage and are on top of the base interest of the loan. This is paid by the buyer.
The validation services fees include appraisal and inspection fees or similar services. These fees may be negotiated between the two parties.
4. Shop around.
You cannot avoid these costs but you can definitely shop around. Fees vary among lenders and markets, depending on the home price. Compare fees between lenders to get the best deal.
5. It can be complicated.
The whole home buying process can be stressful. You may need the help of a trusted agent to guide you through the decision making process. The shrinking inventory in the state now, the rising prices of properties and all the technical aspects may be too daunting for first-time buyers.
Would you like a detailed explanation of the costs of buying a home? Fill out the form below and indicate the best time for me to call you back.
[contact-form to=’lynn@yourhomesf.com’ subject=’Feedback from website’][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Phone ‘ type=’url’ required=’1’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]
