Closing Costs: What to Expect When Buying Your Glenview Dream House

If you've finally found your Glenview dream house, here are a few facts on what you can expect when it comes to the closing costs that will be associated with purchasing your new home.  For starters, you should expect closing costs to be somewhere between three and six percent of the purchase price, and here's where you're going to be spending that money:

1. Insurance Fees and a Title Search:  The title search, which will be done by either an attorney, escrow agent or title company, simply insures that the seller is the legal owner of the property and that there are no outstanding liens against the property.  The lender insists on title insurance as it protects them against any errors that may have occurred in the title search.  Just remember, it doesn't protect either the buyer or the seller.

2. Appraisal Fee:  This fee is for the appraisal that the lender will require to be sure that the value of the property, which the appraiser will figure out, is worth at least as much as you want to borrow.

3. Credit Check Fee:  This is simply to verify your credit score and credit history.

4. Homeowner's Insurance:  This is another thing the lender will require that you purchase in order to get your mortgage, because it protects you and the lender from financial loss should some tragedy befall your home.

5. Flood Certification Fee:  This is paid to a third party to determine if the home you wish to purchase is in a flood prone area and should have flood insurance.

6. Inspection Fees:  An inspection may look like something you could do without since it's not generally required by the lender, but don't.  An inspector can tell if there might be problems down the road when he checks the plumbing and electrical systems, the heating and cooling systems and structural components such as the roof.

7. Loan Origination Fee:  This is simply a processing or administration fee charged by the lender.

8. Private Mortgage Insurance (PMI):  This is insurance to cover the mortgage but is only required when the down payment from the buyer is less than 20 percent of the purchase price.

9. Pre-paid Interest:  Although this will be added into your closing costs, it's really just the interest on your mortgage for the rest of the month in which the closing occurs.  Don't worry, there's usually no mortgage payment due for at least a month.

So there you have the basics of a buyer's closing costs, those mystery figures that accompany any mortgage you get.  They do add up, but most of them are to provide financial protection for the lender, the buyer, the seller or all three of you.

If you're looking for your Glenview dream house, give me, Marla Schneider, a call at 847-657-3790 or contact The Marla Schneider Team online.