Have You Saved Enough Money For Closing Costs? |

There are many potential homebuyers, and even sellers, who believe that they need at least a 20% down payment in order to buy a home or move on to their next home. Time after time, we have dispelled this myth by showing that many loan programs allow you to put down as little as 3% (or 0% with a VA loan).

If you have saved up your down payment and are ready to start your home search, one other piece of the puzzle is to make sure that you have saved enough for your closing costs.

Freddie Mac defines closing costs as:

“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage. These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

Here is a list of just some of the fees/costs that may be included in your closing costs, depending on where the home you wish to purchase is located:

Government recording costs
Appraisal fees
Credit report fees
Lender origination fees
Title services (insurance, search fees)
Tax service fees
Survey fees
Attorney fees
Underwriting fees

Is there any way to avoid paying closing costs?

Work with your lender to see if there are any ways to decrease or defer your closing costs. There are no-closing mortgages available, but they end up costing you more in the end with a higher interest rate, or by wrapping the closing costs into the total cost of the mortgage (meaning you’ll end up paying interest on your closing costs).

Home buyers can also negotiate with the seller over who pays these fees. Sometimes the seller will agree to assume the buyer’s closing fees to get the deal finalized, which is known in the industry as ‘seller’s concession.’

Bottom Line

Speak with your lender early and often to determine how much you’ll be responsible for at closing. Finding out you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to. (reposted via KCM)

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If you are planning to buy or sell and have questions about the real estate market,
please give me a call.

Phone or Text | 425.890.3310
Website | LonnieCartmell.com
Email | lonnie@windermere.com