Closing costs. What are they anyway? And how much can they cost? If you're in the market to purchase a home, knowing what closing costs are and how much they cost are very important. When purchasing a home, you have fees that you are required to pay to third parties who help facilitate the home-buying process. These fees typically total between 2% and 7% of the home's purchase price. So to make the math simple, if you purchase a home for $100,000, closing costs will typically be between $1,000 and $7,000.
If you weren't familiar with closing costs, they can be a frustrating reality for buyers to learn they will have additional out-of-pocket expenses in addition to the down payment. One piece of good news: although buyers are generally responsible for the majority of closing costs, sellers typically will pitch in to cover some of the closing costs.
What Closing Costs is the Buyer Responsible For?
While there is no such thing as typical closing costs, there are some general items:
A loan origination fee (fee lenders charge for processing your loan paperwork).
Credit Report fee.
Title search fee (to uncover any potential liens on the home).
Survey fee (negotiable with the seller, not always needed if seller has one).
Taxes on the money borrowed for your home loan.
PMI (private mortgage insurance) if the buyer puts less than 20% down on the home.
Miscellaneous one-time fees.
What Closing Costs is the Seller Responsible For?
Survey fee (negotiable with the buyer, not always needed if seller has one).
A closing fee, paid to the title insurance company.
Taxes on the sale of the home.
Attorney fee, if they have one.
Title transfer fee (for transferring the title to the new owner).
Real Estate commissions.
If you have additional questions, you can view the complete article here or feel free to reach out to us!