Between saving for a down payment, searching for the perfect home, and applying for a mortgage, it's easy to forget about certain aspects of the home buying process. This is often the case for closing costs. When buying or refinancing a home, it's important to have a strong understanding of what additional feeds you'll need to pay before the process is over.
Closing costs are all the fees and services related to finalizing your mortgage, when buying or refinancing your home loan. While the seller is expected to pay some of these fees, typically the majority of them may fall on the buyer. But how much is paid by the buyer or seller is governed by terms of the purchase agreement.
Ordinarily, you should expect to pay between 2%-5% of your total loan in closing costs. But remember that the purchase contract determines how much gets paid and by whom (buyer, seller). As an example, if you get approved for a loan of $200,000, you may end up paying an additional $4,000-$10,000 - this can sometimes act as a nasty surprise for home buyers. In order to minimize total payments, it is often recommended that you pay them in full up front whenever possible. In some cases, it's possible to negotiate closing costs with your mortgage lender; your lender may also be able to work them into the loan. Just remember you will end up paying interest on closing costs in addition to the principal loan if you choose this option. Many areas benefit from government-subsidized loan programs that can provide financial assistance based on certain conditions; contact our office and we will check to see if any assistance is available for you.
Closing costs can quickly add up.
Buying a home is an exciting process, but the details can at times be complicated. At TMFFMS, we make sure that you have a thorough understanding of what you'll need to pay before agreeing to a loan, and walking you through the entire process. We are dedicated to you!
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