Closing costs refer to the fees and expenses associated with the purchase or sale of a property.
These costs are typically paid at the closing of the transaction and may include a variety of different charges depending on the specific circumstances of the transaction.
Some common closing costs include the following.
Title Insurance: This protects both the buyer and lender from any legal disputes over the ownership of the property. The cost of title insurance can vary depending on the value of the property.
Appraisal Fee: This covers the cost of having the property appraised by a professional to determine its value.
Home Inspection Fee: This covers the cost of having the property inspected by a professional to identify any potential issues or repairs that may be needed. You may be asked to pay at the time of inspection, so don’t forget to budget this cost into your purchase plan.
Loan Origination Fee: This is a fee charged by the lender to process and underwrite your loan application. Origination fees may vary depending on the lender you trust with your purchase.
Prepaid Interest: This is interest that is paid upfront to the lender to cover the interest that will accrue on the loan before the first payment is due.
Recording Fees: This covers the cost of recording the deed and mortgage with the local government.
The total amount of closing costs can vary depending on the location of the property, the price of the property, and other factors.
In general, closing costs can range from 2 – 5% of the purchase price of the property. If you are purchasing a property for $300,000, you could expect to pay between $6,000 and $15,000 in closing costs.
If you have additional questions about closing costs, don’t hesitate to reach out! Our team can help guide you in the right direction.