Buying a house is a grand adventure that places you in new situations and allows you to meet new people. You’ll have many opportunities to learn real estate terms and increase your knowledge about the home buying process. One term you’ll hear often is closing costs.
What are closing costs?
The sum of all the service fees accumulated during the home buying process is referred to as the closing costs. No one person decides this amount because it’s the sum of fees for services provided by a variety of professionals and businesses. You’ll pay the closing costs on closing day. This is the day when you sign all paperwork, pay fees, and receive the keys to your home.
Who pays closing costs?
It’s important to prepare ahead for closing costs because you’ll be expected to pay these out-of-pocket. There are times when the seller will agree to pay all or part of these costs. If this is the case, it will be noted in your contract. Being willing and able to pay these costs could work in your favor if you come up against another buyer who is trying to outbid your offer.
What is a good faith estimate?
Your home mortgage lender provides a good faith estimate of the closing costs at the beginning of the home buying process. You can expect closing costs to be between two and five percent of the selling price of the property. This initial estimate provided by the lender is subject to change. Expect it to increase substantially by the end of the transaction. Before closing day, you’ll receive an itemized list of all fees. Go over this list with your real estate agent to make sure there are no over-charges or errors.
What are the typical closing costs?
- While it’s difficult to pinpoint every single fee that may be included in the closing costs, here is a list of items you may see included.
- Credit Report Fee – To determine your credit worthiness, the lender runs your credit reports. Some lenders cover this cost, but you may see it included in the closing costs.
- Attorney Fees – The attorney that works with you during the real estate transaction has fees that cover time on task and other specifics.
- Origination Fee –Any paperwork or labor required by the lender who is processing your mortgage loan is included in this portion.
- Title Insurance – The mortgage lender will secure title insurance for protection in case something is wrong with the title of the property.
- Title Search Fee – Completed by an attorney or other professional, a title search ensures there are no liens or negative issues with the title.
- Survey Fees – To make sure the size of the property and the borders are correct, your lender may order a survey of the property by a professional.
- Appraisal Fee – A professional real estate appraiser is hired to verify the value of the property. This is ordered by the mortgage loan lender to make sure they aren’t paying more for the property than it’s worth.
- Home Warranty – A seller sometimes offers this as an incentive for buyers. If not, you may choose to purchase one of these to give yourself peace of mind during the first year that you own the house. If anything needs repair or replacement, the home warranty company steps in to handle things.
- Escrow Deposit – This is the amount of any taxes or insurances required by the lender.
- Inspection Fees – Inspectors will be called in to check for damages, systems that aren’t working properly, and insects. The costs for these services will be included in the closing costs.
The best source of information about local communities and real estate topics is your real estate agent. Give Michael Lewicki a call today at 613-829-1818 to learn more about the area, discuss selling your house, or tour available homes for sale.buy modafinil canada pharmacybuy modafinil chinabuy modafinil chemist warehouse