First time buyers, and even homeowners who haven’t purchased a home in quite some time, can be surprised when they learn there are closing costs in addition to their down payment required when purchasing a home. Early in the process, whether with your Realtor® or your lender, closing costs can be discussed to those costs don’t come as a surprise. Closing costs may include, but aren’t limited to:
- loan origination fee
- appraisal fee
- pro-rated homeowner insurance
- pre-paid condo HOA fees
- pro-rated real estate taxes
Typical closing costs can be estimated at about 3% of the purchase price. In addition to closing costs add the down payment for the total funds needed to close on your home purchase. Loan programs with as little as 3% are available and there are some down payment assistance programs, so its definitely worth your time to explore financing options with your lender before beginning your home search.
If you plan to buy a home in 2016, now is the time to meet with your lender and Realtor® to start the home search and loan approval process. Locally the “spring”market swings into gear in late January. Stay ahead of the game (and other buyers) by having your loan approval finalized and start educating yourself on which communities best fit your budget, lifestyle, commute needs, etc.