All You Need to Know About Foley, Alabama Closing Costs

The beautiful city of Foley is one of Alabama's most charming and desirable communities because of its low crime rate, friendly residents, and many job options. The local administration is also focused on the rapid growth of this town.

Not only Foley is great for families but also for individuals and retirees. The bountiful opportunities in housing, education, employment, and more are the topmost key to the increase of residents in the area.

If you are curious about Foley's real estate market, this article will tell you an essential part of home purchasing in the city: closing costs. 

Foley, Alabama Closing Costs

Here is what your closing costs in Foley Alabama might look

Escrow Deposit for Taxes and Insurance
Prepaid charges describe this expense. Expect to prepay six months of property insurance and property taxes.

Recording Fees

The title agent records the title, loan, and other paperwork in the courthouse after closing.

Owner's Title Insurance
It's up to you whether or not to purchase this, but like a lender's title insurance, it gives you a piece of assurance if there are issues with the title after closing.

Private Mortgage Insurance
Your lender may request mortgage insurance if your house appraisal exceeds 20 percent of the total loan amount.

Property Taxes
At closing, property taxes must be paid for 2–3 months.

FHA Initial Mortgage Insurance Premium
Only FHA-insured loans. The 1.75% origination fee can be paid at closing or added to your loan.

Homeowner's Association
The seller might have paid the monthly dues for condominiums and homes with HOA and may ask for a refund. 

Application Fee

This could cover a credit report or house valuation. Ask your lender whether and what this fee covers. Sellers sometimes pay for appraisals as part of closing fees.

Appraisal Fee
Mortgage lenders require this. If you can't negotiate for the seller to pay closing costs, expect to spend multiple hundred dollars.

Attorney Fee
A real estate attorney can overlook the closing transaction. 

Courier Fee
This fee will cover wire transfers and document processing if you want to speed up your business transaction.

Flood Insurance
If your property is in a flood zone, you'll need several months of flood insurance before closing.

Homeowner's Insurance
Homeowners' insurance must be pre-paid like any other insurance—budget for several months of homeowner's insurance upon closing.

Lender's Title Insurance
Whenever a title defect is identified after closing, the lender asks for a small charge to compensate for their losses.

Title Search
The title company must certify that your property has no liens, so this cost is necessary.

Transfer Taxes
A transfer tax must be paid whenever a property is transferred from one owner to another.

Credit Report Fee
A complete, three-bureau credit report will determine your interest rate.

VA Funding Fee
If you wish to get a Loan, you must pay the closing costs unless you get a waiver or finance them.

Origination Fee
Commissions are typically paid at a rate of 1% of total sales.

Pest Inspection
The terms of the sale will determine who is responsible for this expense, the purchaser or the seller.

Prepaid Interest
Lenders usually expect you to pay mortgage interest from closing to the first payment.

Loan Discount Points
Loan discount points are 1%. Points at closing can lower a loan's interest rate when negotiated with your lender.

Ways to Reduce or Eliminate Closing Costs in a Real Estate Transaction

Try to Secure a Mortgage With No Closing Costs

Discussing closing expenses with your mortgage lender is the first step. No-closing-cost mortgages can be negotiated. Nonetheless, closing costs must be paid. No-closing-cost mortgages may have higher interest rates.

Bargain With the Seller
It is possible to negotiate with the seller to have them pay for all or a portion of the closing costs. Lenders may allow sellers to assume these expenditures as credits if they are tax-deductible business expenses.

Get the Best Deal
Look around for better financial terms and services.

Look for Army or Union Discounts

Check to see if your union or the military has any discounts available. One sort of financial assistance offered to members of the armed services and labor unions who are purchasing a property is discounts or rebates on closing costs.

Discuss Upfront Fees With the Lender

Closing costs can add up, so it's worth asking your lender whether they'll cover any of it or give you credit.

Apply for a Loan Through the FHA
Financially tight homebuyers may acquire FHA-guaranteed loans (FHA). FHA loans have lower down payments and interest rates.

Set the Closing Date Towards the End of the Month
Buyers must pay mortgages after closing. The buyer usually starts mortgage payments on the first day of the month, regardless of whether the loan closes mid-month. Everyday interest accrues from closure through the first mortgage payment. 

Wrap Up

Buying a property is a tiring process, especially for first-time homebuyers. You will need help understanding where your money will go and what expenses you must pay. Working with an experienced realtor would make your homebuying journey smoother and quicker. 

If you wish to know more about the closing costs in Foley, Alabama, please do not hesitate to contact me at your most convenient time.