Top 15 Closing Costs You Need to Know!
When buying or selling a home in the United -States buyers and sellers will encounter several categories of costs. Category 1 is your down payment. Category 2 is your deposit when you make an offer on a home. Category 3 is commissions, particularly if you are a seller, (though this may change in coming years to include the buyer). Category 4 is what are commonly referred to as “Closing Costs “.
15 CLOSING COSTS
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Top 15 Closing Costs: The main Closing Costs typically include:
1. **Loan Origination Fees**: Charged by the lender for processing the new loan.
2. **Appraisal Fees**: To assess the home's value for the lender.
3. **Credit Report Fees**: For obtaining your credit history from credit bureaus.
4. **Title Insurance**: Protects the lender and possibly the buyer against problems with the title.
5. **Escrow Fees**: Paid to the company overseeing the closing process.
6. **Recording Fees**: For recording the new deed and mortgage with the local government.
7. **Survey Fees**: For a property survey to confirm property lines.
8. **Attorney Fees**: If an attorney is involved in the closing process.
9. **Home Inspection Fees**: For a professional inspection of the property's condition.
10. **Pest Inspection Fees**: In some regions, a separate termite or pest inspection is necessary.
11. **Homeowners' Insurance**: Typically, the first year’s premium is paid at closing.
12. **Property Taxes**: Buyers often need to pay a portion of the property taxes upfront.
13. **Prepaid Interest**: Interest on the mortgage that accrues from the date of settlement to the first monthly payment.
14. **Private Mortgage Insurance (PMI)**: If your down payment is less than a 20%, you might need to pay the first month's PMI.
15. **Transfer Taxes**: Taxes for transferring the title from the seller to the buyer.
Closing Costs vary by property: The specific costs can vary based on the location, type of property, and loan details. Buyers should receive a Closing Disclosure form from their lender that outlines the exact costs they will incur. Buyers and Sellers can obtain a summary of potential Closing Costs from an escrow company, an experienced Title Officer or an experienced Real Estate Team.
Experienced Helpers: Remember most real estate agents close less than 10 transactions a year, many less than five. Real estate buying and selling has many twists and turns so why choose a dentist who you like to play golf with but has only done 5 fillings a year! Choose experienced, multi transaction professionals who will support you in your real estate journey.
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