Carlsbad Buyers - Home Buying Costs You May Not Think About (Part 2)
There are lots of costs associated with searching for and buying a new home in Carlsbad, or anywhere for that matter, in addition to the big ticket item itself.
In case you missed Part 1, we discussed home buying costs associated with the home search, inspections, appraisals and more. (Note: These costs may be rather different if your transaction is taking place in another state).
ESCROW and CLOSING COSTS
Let's talk about the costs associated with your home purchase once you have an accepted offer. While some states use attorneys in the transaction, here in Carlsbad (and California in general) the transaction is handled through a neutral 3rd party, the escrow company, whose responsibility is to ensure all terms and conditions of the contract are met by the buyer and seller before closing and the transfer of the title to the buyer.
Here are SOME of the costs:
$$$ Escrow fee - the fee for the services of the escrow company (typically the seller and buyer split the cost but this may be negotiated). This fee will generally run from around $500 for low end homes to over $1000 and is determined by the purchase price.
$$$ Prorated San Diego County property taxes - you will either reimburse the seller for taxes paid from the date of closing until the end of the tax period (semi-annual) or pay the portion owed if not already paid by the seller. In addition, if you finance your purchase your lender will require a prorated portion of taxes to be collected in advance at closing (it could be 6 months) so when the taxes are due the lender can pay them (if you want to pay taxes yourself and the lender allows this, this does not apply)
$$$ Pre-paid Interest - interest on your loan from the date of closing until your first mortgage payment
$$$ Homeowner's Insurance - lenders generally require 1 full year paid in advance with proof (a binder) provided at closing
$$$ Your down payment - if you have a down payment (true for probably anyone unless a VA loan) you will pay the balance due (minus the amount of the deposit check you submit with your offer and which gets deposited with escrow once opened)
$$$ Mortgage fees - those associated with your particular mortgage which may include an application fee, appraisal fee, credit report fee, and loan origination fees/points.
$$$ Miscellaneous fees that vary from transaction - flood certificate, overnight mail, document recoding, title preparation,
Of course, don't forget those other small fees that can add up - phone calls, mail, printing and copying, texting your agent, and your celebratory dinner at closing.
In Part 3 we will cover the other costs of buying a home that you can expect once you close escrow. They are worth knowing about and planning for.
If I can provide more information about Carlsbad real estate and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.
All content copyright © 2010 Jeff Dowler Carlsbad Homes and Real Estate Tidbits