SolveYourProblem
Real Estate Article Series
Buying a Home: Closing Costs
It might surprise you to find out that there
are many fees associated with buying a home. Often
future homeowners are shocked at the added costs of buying
a home because of
the varied closing fees for things such as document preparation
and other types of administration fees. Having an expectation
of the potential closing cost associated with buying your home
will aid you to budget your finances appropriately, and help
you determine early on what you can realistically afford to
pay for a home.
Lenders
fees vary from state to state. However, you can expect
certain fees to be tacked onto your loan. Make sure to check
out with your lender the different costs that will be applied
to your purchase for your home. Typically you will be required
to pay these fees at the closing.
Processing
Fees – Monies paid to begin the processing of the
loan. Costs run can run from a few hundred dollars to a couple
of thousand.
Document
Preparation Fees – A fee for the write up of your
loan. Costs run approximately from $300 – 400 dollars.
Review
Appraisal Fees – Cost vary accordingly, but you can
expect a payment of $200.00 dollars on average.
Wire
Fees – Electronic payment form for funding your loan
and fees fluctuate.
You need to be aware that there are other fees that will be
incurred when purchasing a home. Some of the fees associated
with home buying are advanced or one time fees and others are
fees that will have to be paid again. Check out some of the
other fees that you will be required to pay when purchasing
your home.
Loan
Origination Fees – Fees based on a point system for your
mortgage. Usually if you are able to pay more in a down payment,
your points will be lower, thereby saving you costs on a higher
interest rate.
Credit
Report and Underwriting Fees – Depending on the finical
institution running a credit report the fees will vary, but
expect to pay for a detailed report on your credit history.
Costs are typically around $100.00. Costs for underwriting
a loan can be on the costly side – running from several hundred
to a thousand dollars.
Property
Tax Fees – Independent fees paid yearly to an outside
representative to ensure payment of property taxes. Property
tax fees can be in a special escrow account which can be required
by the lending institution before you purchase a home.
Appraisal
Fees – Prices vary on home price and geographic
area. Independent appraisal fees usually run from $350.00 and
upwards.
Homeowner
Insurance Fees – Dependent on the financial institution
a six month to one year payment for home insurance is usually
required.
It’s easy to see why most first time home buyers believe that
there couldn’t possibly be any more fees to consider when purchasing
their home. However, there are other fees that they might not
realize that they will have to pay to be able to move into
their dream home. Other fees include title clearance fees which
insure that the title is properly titled, and cleared to and
for them. Also, notary fees for the different documents associated
with home buying is necessary, it makes the documents a legal
and viable document. Costs to have your documents notarized
are not that expensive, but it is another fee that you must
consider. Fees for recording your documents at your local courthouse
are another area of cost; again they are not that costly.
This
list of fees is certainly not an all inclusive list, other costs can be found when dealing with mortgage companies,
or federally sponsored programs such as HUD (Housing and Urban
Development). The best defense against rising cost, and subsequently
defaulted loans and ruined credit, is to check out as much
as you can about home owning in general, and then to wisely
evaluated your economic portfolio. Consider other factors outside
of closing costs, such as long term savings and investments
that will need to be managed once you retire. Never jump too
quickly into the responsibility of a long term financial commitment
such as home ownership unless you’re sure that you can meet
it. # # # # #
SolveYourProblem.com : 2007
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