Don’t Get Caught Off Guard by Closing Costs As a homebuyer, it’s important to plan and budget for the expenses you’ll encounter when you purchase a home. While most people understand the need to save for a down payment, a recent survey found 41% of homebuyers were surprised by their closing costs. Here’s some information to help you get started so you’re not caught off guard when it’s time to close on your home. What Are Closing Costs? One possible reason some people are surprised by closing costs may be because they don’t know what they are or what they cover. According to U.S. News and World Report: “Closing costs encompass a variety of expenses above your property's purchase price. They include things like lender fees, title insurance, government processing fees, upfront tax payments and homeowners insurance.” In other words, your closing costs are a collection of fees and payments made to a variety of individuals and organizations who are involved with your transaction. 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 Will You Need To Budget for Closing Costs? Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical to achieving your homebuying goals. According to the Freddie Mac article mentioned above, the costs to close are 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 cover your closing costs. Let’s say you find a home you want to purchase for the median price of $350,300. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,000 and $17,500. 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. What’s the Best Way To Make Sure You’re Prepared At Closing Time? 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 understand what you’ll need at the closing table is to work with a team of trusted real estate professionals. An agent can help connect you with a lender, and together they can provide you with answers to the questions you might have. Bottom Line In today’s real estate market, it’s more important than ever to make sure your budget includes any fees and payments due at closing. Let’s connect so you have the knowledge you need to be confident going into the homebuying process.
For Buyers
Why a Move Could Bring You More Happiness This Year Over the past two years, we’ve lived through one of the most stressful periods in recent history. Because of the health crisis, many of us have spent more time at home and that’s led us to re-evaluate both what we need in a house and how much we appreciate having a safe space. If you’ve found your current home isn’t filling...
How To Think Strategically as a Buyer in Today’s Market The game of chess can provide incredible lessons to apply to all aspects of life, including the homebuying process. Chess requires you to plan and think about your strategy from the very beginning of the game. The homebuying process, like chess, requires strategy and planning. Here are a few things to keep in mind to ensure your plan is as strong as possible when you begin your home search. Pre-Approval: the Best Opening Play To Make as a Homebuyer It’s important to have a great opening play when you’re buying a home. And the best move you can make when you begin your home search is getting pre-approved by a lender. You’ve probably already heard this is an important step, but what exactly is pre-approval and what benefits does it provide you? As Freddie Mac puts it: “The pre-approval letter from your lender tells you the maximum amount you are qualified to borrow. Getting a pre-approval letter is not a loan guarantee, it simply states how much your lender is willing to lend you. . . .” And while determining how much you can afford at the start of your search is critical, the pre-approval letter also serves another important purpose. Freddie Mac also notes: “This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.” In the game of chess, a strong opening move signals to your opponent that you’re a serious competitor. As a homebuyer, your pre-approval letter signals to the seller that you’re a serious, interested buyer. Homebuying: It’s a Team Game, Not a Single-Player Experience Every step you take to create your strategy as a buyer is important in today’s market. Why? Mortgage rates are still low, but increasing. Prices are going up. There’s a limited supply of homes for sale. These are just a few key variables in today’s market you need to be prepared for. That means leaning on expert guidance as you plan every move is more important than ever. Have a team of professionals – like your trusted real estate agent and a loan officer – every step of the way to make sure you make the right moves. Bottom Line Getting a pre-approval letter isn’t just good strategy, it can be game-changing. It allows you to get a full understanding of what you can afford, and it signals to sellers that you’re serious. Let’s connect today to ensure you’re playing chess and being strategic during the home buying process.
As Home Equity Rises, So Does Your Wealth Homeownership is still a crucial part of the American dream. For those people who own a home (and those looking to buy one), it’s clear that being a homeowner has considerable benefits both emotionally and financially. In addition to long-term stability, buying a home is one of the best ways to increase your net worth. This boost...
Key Questions To Ask Yourself Before Buying a Home Sometimes it can feel like everyone has advice when it comes to buying a home. While your friends and loved ones may have your best interests in mind, they may also be missing crucial information about today’s housing market that you need to make your best decision. Before you decide whether you’re ready to buy a home, you...
6 Reasons to Celebrate National Homeownership Month Our homes are so much more than the houses we live in. For many, they’ve also become our workplaces, schools for our children, and safe harbors in which we’ve weathered the toughest moments of a global pandemic. Today, 65.6% of Americans call their homes their own, a rate that has risen to its highest point in 8 years. As...