When buying a home, it’s important to have a budget and make sure you plan ahead for certain homebuying expenses. Saving for a down payment is the main cost that comes to mind for many, but budgeting for the closing costs required to get a mortgage is just as important.
What Are Closing Costs?
Closing costs are fees levied when you take out a mortgage. Closing costs are paid at closing and typically range from 3% – 6% of the loan amount.
Closing costs are fees paid to cover the costs required to finalize your mortgage when you’re buying or refinancing a home. They’re paid at closing, the point in time when the title of the property is transferred to the buyer.
Trulia gives great advice, explaining:
“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.”
Instant Estimates with Pruitt
Trying to figure out how much you should budget for? Use our online calculator to generate instant Seller Net Sheets, Buyer Estimates, and more.
As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Let’s connect so you can be certain you have everything you need to land your dream home.