Buying a new home and getting a loan to fund it is a long process and that’s the reason why we want to help you along the way. Investing your borrowed money in expensive things such as a new house and lot can be exciting but freaking too especially if you aren’t aware of the over-all costs that you need to handle and pay off. Aside from the interest rates, down payment and other fees, you are also need to be aware of the closing costs.
Most of the buyers aren’t informed nor they chose not to learn that getting and signing the contract isn’t the end of payment fees when it comes to buying houses. They aren’t totally aware that there is still a handful of money needed before everything is settled. In this article, we will help you understand what closing costs are.
What are closing costs?
Closing costs are just all the expenses associated with buying a home. This may be paid by the buyer or sometimes by the third parties.
Mortgage association fees – These are another costs that the lender charges in able to process the loan application. It can be paid at the same time the loan request is submitted or at the closing before the loan is released.
Broker commission – This is the money you need to pay especially if you asked for a professional help in buying your new property. If you get a real estate broker to help you with the over-all buying process starting from looking for a valuable home up to the loan processing then expect that you need to give them their commission at the closing. Usually, this is paid by the seller of the house but in kind return, as a buyer who benefited from the broker’s hard work, we think giving them something surely won’t hurt.
Survey, title search and recording fees – Once you’re done choosing the best property and you are ready to buy it then you need all the legal papers to transfer the property into your name. Thus, these papers such as surveys, title searches and records come with prices and you can talk to your seller whether they’ll handle these costs or you will be the one to pay. Clear these things up to your seller beforehand to avoid surprise costs.
Home warranty and insurance – These are costs with some great benefits for the property owner and are typically paid at closing. Usually, these fees are covered by the buyer but there are also times that it’s already included in the contract as the seller’s responsibility. If you will shoulder these fees as a buyer then it’s totally fine since you will get the entire benefits anyway. So don’t regret.
These are just some of the closing costs that you need to consider when getting a home loan and buying a new property. They may seem to be scary but don’t worry because these are all of your benefits.