Closing costs are an essential consideration for homebuyers, often overlooked in the excitement of purchasing a new home. These costs, outlined by Bankrate, encompass various fees and expenses incurred before officially becoming a homeowner.
A recent article from Bankrate explains:
“Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”
According to Freddie Mac, while the closing costs can vary by location and situation, closing costs typically include:
- Government recording costs
- Appraisal fees
- Credit report fees
- Lender origination fees
- Title services
- Tax service fees
- Survey fees
- Attorney fees
- Underwriting Fees
How Much Are Closing Costs?
Freddie Mac suggests budgeting between 2% and 5% of the home’s total purchase price for closing costs. For example, on a median-priced home of $384,500, this could amount to approximately $7,690 to $19,225. However, actual costs may vary depending on individual circumstances and the property’s specific details.
Make Sure You’re Prepared To Close
To ensure readiness for closing, Freddie Mac advises prospective buyers to understand all associated costs, including both the down payment and closing expenses. Collaborating with a team of trusted real estate professionals is crucial for gaining insight into the financial commitments involved and addressing any uncertainties that may arise.
Bottom Line
Ultimately, proactive planning and seeking guidance from knowledgeable professionals can empower homebuyers to navigate the closing process confidently. By being well-prepared, buyers can approach homeownership with clarity and peace of mind, knowing they have the support and expertise needed to fulfill their goals.