In addition to saving for your down payment, you may need to Save for closing costs

In addition to saving for your down payment, you may need to Save for closing costs

In addition to saving for your down payment, you may need to Save for closing costs

WHAT KIND OF CLOSING COSTS CAN I EXPECT?

These are the fees and costs for services and actions completed during the processing and closing of your loan. Some are paid when the action happens, such as an inspection or appraisal. Others are paid at closing and are included on your settlement statement. Typically, homebuyers will pay between about 2 and 5 percent of the purchase price of their home in closing costs. So, if your home is $150,000, you might pay between $3,000 and $7,500 in closing costs.

Let’s take a look at some of the closing costs you may see:

  • Credit report
  • A loan origination fee, which lenders charge for processing the loan paperwork
  • Attorney’s fees
  • Inspections required or requested by the lender or you
  • Discount points, which are fees you pay in exchange for a lower interest rate
  • Appraisal fee
  • Survey fee, which covers the cost of confirming property lines
  • Title insurance, which protects the lender in case the title isn’t clear
  • Title search fees, which pay for a background check on the title to see if there are other unpaid mortgages or tax liens on the property
  • Escrow deposit, which may be used to pay toward future property taxes, homeowners insurance and private mortgage insurance
  • Pest inspection fee
  • Recording fee, which is paid to a city or county in exchange for recording the new land records
  • Underwriting fee, which covers the cost of evaluating a mortgage loan application