Take the Tour of Morris Plains!

Closing Costs? Here's Your Guide to The Fees!

If you've ever purchased or sold a home, or are thinking about buying a home for the first time, then someone's probably already planted in your ear that closings are expensive.  Closing your home should be exciting, and once you understand the process and how it works, it can be, so don't let the costs cloud your decision.

While there is no doubt that buying a home is a customary daily practice, it is in no way a simple financial transaction.  You will realize this as we explain some of the most common closing costs you'll encounter when buying a home.

Firstly, closing costs are the actual expenses that the lender incurs in the origination of a new home loan.  In addition, closing costs are expenses that cover fees associated with the transfer of property ownership, fees paid to state and local governments, and the costs of obtaining a mortgage loan.

Unless in your offer and contract, the seller agrees to pay them for you, these expenses are charged to the buyer and often runs between 2 and 3 percent of the amount being borrowed. But remember, different states do have different fees and taxes that are a part of these costs, it's impossible to generalize nationwide for buying a home.

When selling, a good rule of thumb is to calculate 7% of your sale price and that should estimate what all the fees will be.. or 1% over the realtor's fees for your total costs for selling.

All closing costs must be listed on your HUD-1 settlement form, a document that is required to be filled out prior to finalizing the purchase of your home.  The Real Estate Settlement Procedures Act (RESPA) requires the lender to provide homebuyers with a Good Faith Estimate within three days of loan application.

RESPA also states that homebuyers have the legal right to request a copy of the HUD-1 Settlement Statement 24 hours before their closing is scheduled. The HUD-1 clearly defines all closing costs, including those that are to be paid by the buyer and the seller.

Some costs are one-time fees (non-recurring closing costs, such as title search, termite inspection, appraisal, etc.); while other fees such as homeowner's insurance or property taxes are things homeowners will continue to pay on a regular basis after closing on the sale.

For a good reference and list for What Are My Closing Fees?, check out :

Buying and selling a home can be the most stressful process you may ever experience and we know that.  Even if the process is not overly stressful, it can often be a personal and emotional transaction and will be one of the most significant. 

Let LouAnn and her team answer all your questions and guide you to a stressful and exciting closing!

No comments: