Hixson, TN and Soddy Daisy, TN Homes for Sale, Closing costs - an overview...
Most people finance their home purchase. Almost every home loan comes with closing costs.
This post will not go into closing costs in depth. Rather, it will give a general overview of closing costs, so you can estimate them off the cuff during your home shopping.
Closing costs for loans to buy Hixson, TN and Soddy Daisy, TN homes for sale can be divided into four main categories. They are:
- Lender fees
- Escrow fees
- Title fees
- Government fees
Let's look at each one.
Lenders fees: Usually, your lender will charge an origination fee. It will likely run about 1% of the loan amount. If the home for sale you are buying is super cheap, it may even be a little more.
Along with the origination fee will be a processing fee and an underwriting fee. These will vary from lender to lender, but they will likely total about $800 or $900.
Escrow fees: Escrow fees are next. These are little tougher to estimate since they involve two "moving targets", which are home owner's (hazard) insurance and property taxes.
Lenders collect both in advance to set up your escrow account, so that they can pay your taxes and insurance at the end of the year. The lender will collect a year's worth of insurance and a few month's worth of taxes.
Insurance premiums vary from company to company. And taxes vary from house to house. So, it is a good idea to talk to your insurance agent in advance. Also, learn how much the taxes are on any home for sale which interests you.
Title fees: These include the cost to prepare the various paperwork needed to actually close the loan. This will include a closing fee and document preparation fee totaling about 200 bucks.
Along with this, there will be the title insurance. This is a one-time premium. It should total up to about three-quarters of one percent. So, the title insurance on a $100,000 home for sale will run about $750. This is not to the penny, but it gives you a general idea of the cost.
Government fees: Finally there are government fees. For Hixson, TN and Soddy Daisy, TN homes for sale, these will also be about three-quarters of one percent. So, again, the government fees on a $100,000 home will run about $750.
To recap
Using the example of a $100,000 home for sale, closing costs should go something like this -
Lender fees = approximately $2,000
Escrow fees = varies (consult you insurance agent and learn the property taxes on the home for sale you are interested in.)
Title fees = about $1,000
Government fees = about $750
Again, this is not a scientific formula. It is just a way to figure your closing costs in your head as you shop for your next home.
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