Buying a Home? Don’t Forget to Budget for Closing Costs!

Saving for a down payment is a key step in the homebuying process that many people focus on, but there are also several other costs that you may have to pay as well, such as closing costs, which are required to obtain a mortgage.

What Are Closing Costs?

According to Trulia,

“When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.”

For example, if you buy a $250,000 home, that amount could be between $5,000 and $12,500 in closing fees. Keep in mind, the price of the home has an impact on the closing costs. As mentioned before,

Closing costs are typically between 2% and 5% of your purchase price.

 Trulia gives more great advice, saying,

“There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is the Closing Disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.” You will, of course, receive a Loan Estimate with your initial disclosure documents, and a revised Loan Estimate during the processing of your loan if there is a changed circumstance.

Bottom Line

Apex is here to answer any of your questions about the homebuying process. Let’s connect to work up a plan that includes budgeting so you can purchase your fantasy home confidently – without any surprises!