Closing Costs - Don't Forget About Them!

When looking to buy or build a home, it is important to know how much you can spend and plan ahead. Most homeowners know that the first step is saving for a down payment, however, sometimes homeowners forget about closing costs. The team at Faber Builders is here to help you understand what closings are why budgeting for them is important.

Closing Costs -What Are They?

According to Trulia:

“When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.”

For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater. As mentioned above, closing costs are typically between 2% and 5% of your purchase price. 

Trulia gives more great advice, explaining:

“There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.”

The Bottom Line

In a time when prices are on a continuous rise, it is important to make sure you include closing costs in your plan for buying or building a home. If you would like more information about what goes into closing costs and how to budget for it, fill out the form below! We would love to help you through your home building journey.



This post, Don't Forget to Budget for Closing Costs, first appeared on the Keeping Current Matters website