Most home buyers have to pay closing costs when the purchase a home. Typically, although the total amount varies, buyers end up paying closing costs that total between 2 and 5 percent of the homes total value.
However, if you’re like many people, you aren’t sure what fees comprise closing costs – or whether you have to pay them at all.
What Are Closing Costs?
Lenders and third parties charge buyers fees that are bundled into closing costs. Usually, you pay these fees when you sign the final paperwork for your mortgage. In some cases, your closing costs can be included in the total cost of your mortgage; in others, they can be waived entirely.
Usually closing costs include fees such as:
- Appraisal fees and survey fees
- Attorney’s fees
- Credit check fees
- Discount points, if they apply in your situation
- A home inspection bill
- Loan origination fees (these are the fees that lenders charge for processing mortgage paperwork)
- Title insurance
- The recording fee for the city or county
- Underwriting fees (these are the charges from the lender for evaluating your loan application)
- Your escrow deposit
Will You Know What Your Closing Costs Will Be?
Lenders are required by law to give you a “good faith estimate” that tells you how much your closing costs are likely to be. They must give you this estimate within 3 days of your loan application. However, under federal law, the fees listed on your good faith estimate can change by up to 10 percent.
Your lender is supposed to give you a HUD-1 statement that details your closing costs within one day of closing. Most buyers choose to compare it to their good faith estimate, and if the numbers are significantly different, it’s always okay to ask your lender to explain why.
Are You Buying a Home in Williamson County or Davidson County?
Call us at 615-473-5973 or contact us online today. We’ll start looking for your dream home right away.