Closing costs can be as much if not more than the downpayment you make on your home. Make sure you obtain a Good Faith Estimate from your lender prior to commiting to them. This document will give you a breakdown of the various closing costs with an estimate of what each expense will cost you. The typical closing costs you will likely incur are:
Points- an optional fee paid to lower your interest rate
Loan Origination Fee
Credit Report Fee
Appraisal Fee
Recording Fees
Mortgage Recording Tax
Title Insurance
Survey
Homeowners Insurance
Lender’s Attorney Fee
Municipal Search Fees
Escrows for Real Estate Taxes and Insurance
You should plan to spend approximately 5% to 6% of the loan amount for closing costs. Once you know your projected closing costs, you can move forward with confidence in your transaction. For some, once they are told this number, they may reduce their downpayment or decide to finance a portion or all of their closing costs. The key is to carefully review your numbers with your attorney prior to entering into yourcontract.
