What will I have to pay in closing costs when purchasing a home?


Closing costs can be as much if not more than the downpayment you make on your home. Make sure you obtain a Good Faith Estimate from your lender prior to commiting to them. This document will give you a breakdown of the various closing costs with an estimate of what each expense will cost you. The typical closing costs you will likely incur are:

Points- an optional fee paid to lower your interest rate

Loan Origination Fee

Credit Report Fee

Appraisal Fee

Recording Fees

Mortgage Recording Tax

Title Insurance

Survey

Homeowners Insurance

Lender’s Attorney Fee

Municipal Search Fees

Escrows for Real Estate Taxes and Insurance

You should plan to spend approximately 5% to 6% of the loan amount for closing costs. Once you know your projected closing costs, you can move forward with confidence in your transaction. For some, once they are told this number, they may reduce their downpayment or decide to finance a portion or all of their closing costs. The key  is to carefully review your numbers with your attorney prior to entering into your contract.


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