What are closing costs?
Beyond the down payment, as a home buyer, you will also be responsible for closing costs. These fees and expenses are paid when you close on your home and can run 2 to 6% of the loan amount. So yes, closing costs can in some cases, be just as much as the amount you’ll need for your down payment.
What exactly is included in this variety of expenses?
Closing costs may include:
• title insurance
• title search
• recording fees
• loan origination fees
• prepayment on private mortgage insurance
• prepayment on homeowner’s insurance
Be sure to talk to your mortgage lender about:
• specifics for your home purchase
• what closing costs to expect
They will help better prepare you for the home buying process.
The thought of having to save tens of thousands of dollars for your down payment and closing costs can be daunting.
• plan ahead
• be committed to saving
• pay down any existing debt
• set up an automatic savings plan online