What To Expect In Closing Costs On A Home Purchase
By W. Troy Swezey
taking advantage of this year’s low mortgage rates to purchase
a home. Pent up with excitement, many families, who have scrimped and
saved for a down-payment, jump for joy when the mortgage lender finally
approves their application. But, they should realize that there’s
a whole new set of expenses that must be covered before actually closing
on the sale.
are often taken aback by up-front closing costs such as mortgage and
title insurance, attorney fees, recording fees and loan points, which
can run into the thousands of dollars. But there is no need to be afraid
of these charges. With a little background on their purpose and shrewd
financial foresight, closings can be a breeze.
charge for processing the loan can be determined at the beginning of
your buying process. Referred to as “points,” these charges
are expressed as a percentage of the total loan. For instance, three
points are equal to 3 percent of the borrowed amount. “Points”
can also become a tool for negotiation with the lender and seller. In
a buyer’s market, home sellers will often agree to pay mortgage
fees in order to close a deal.
can be a substantial expense. The one-time title fee, including search
and examination, averages around $430 for a $100,000 home, but it’s
recommended that you check with a local title insurance agent ahead
of time to effectively determine what you’ll owe before closing.
costs, such as attorney charges, and recording, transfer and inspection
fees, can also be predicated ahead of time by the buyer. Most often
pest and survey inspections, although included in the official closing
statement, are conducted and paid for long before the closing date.
However, buyers should consider them as additional up-front costs.
costs, such as “points,” are fully tax deductible that tax
year if you show proof of a separate lump sum payment. They are not
deductible in a few cases when the loan is the result of re-financing
rather than a home purchase. Application, appraisal, documentation and
broker fees can not be deducted.
require payment of property taxes at closing. In some instances, buyers
and sellers are asked to put money into an escrow account that will
cover any past and future tax obligations. Be sure to check with an
attorney or real estate agent before the closing to determine your property
prepared to pay any assessments if buying a condominium or into an association-governed
property. Fees for credit reports, notary public seals and assumptions,
which includes the processing of official documents, may also arise.
what total closing costs will be before starting your home search can
help you better understand what price range is right for you. In the
end, the process of closing on a mortgage will be easier than you think,
leaving more time to plan for your new home.
Troy Swezey is the author of “WHAT TO EXPECT IN CLOSING
COSTS ON A HOME PURCHASE." As a Realtor at Century 21 Paul
& Associates, he has helped many individuals with their
real estate needs. Visit his web site to download his free e-book,
“REAL ESTATE SECRETS EXPOSED.” http://www.TroyIsMyRealtor.com
or mail to: TroyC21@usa.net