Some Highlights
Want to know some of the top mistakes sellers are making today and how to make sure they don’t happen to you too?
The biggest missteps are pricing a house too high, skipping repairs, not being objective, and not being willing to negotiate.
And the best way to avoid falling into any of these traps is to partner with a real estate agent and lean on them for advice.
Before making the decision to buy a home, it’s important to plan for all the costs you’ll be responsible for. While you’re busy saving for the down payment, don’t forget you’ll want to prep for closing costs too.
Here’s some helpful information on what those costs are and how much you should budget for them.
What Are Closing Costs?
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 . . .”
Simply put, your closing costs are the additional fees and payments you have to make at closing. According to Freddie Mac, while they 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?
According to the same Freddie Mac article mentioned above, they’re typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to budget.
Let’s say you find a home you want to purchase at today’s median price of $384,500. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,690 and $19,225.
But keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.
Make Sure You’re Prepared To Close
Freddie Mac provides great advice for homebuyers, saying:
“As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”
The best way to do that is by partnering with a team of trusted real estate professionals. That gives you a group of experts to help you understand how much you’ll need to save and what you’ll want to be prepped for. It also means you have go-to resources for any questions that pop up along the way.
Bottom Line
Planning for the fees and payments you’ll need to cover when you’re closing on your home is important. Partnering with a local real estate professional can give you the guidance and confidence you need throughout the process.
Some Highlights
Home affordability depends on three factors: mortgage rates, home prices, and wages.
Mortgage rates are down from their recent peak, home prices are expected to rise at a slower pace, and wages are increasing faster than usual.
That’s good news if you want to buy a home because it means affordability is getting better.
When you’re ready to buy a home, reach out to your local real estate professional.