When first time home buyers are told what they might have to expect at closing, it’s like sticker shock. First time home buyers need to be educated on what they will have to bring to the table when papers are transferred. Cost of taxes and administrative costs vary in some states and can either be a plus or a minus.
My husband and I bought our first home in our mid years and we were naturally very excited and happy that the bank approved our loan. From then on it was a matter of getting our affairs in order and preparing to move. At that time we depended solely on our agent for all details and when we were given a reasonable estimate of the closing costs, we listened but with almost half an ear. It was like the day you get married and you’re so excited during the ceremony that you only half hear what the preacher or minister (if you will) is saying.
Closing costs are exorbitant because there is so much to consider: Broker’s Commission, Transfer Tax, Private Mortgage Insurance, Title Fees, Credit Report fees, Appraisal fees and Inspection fees. Then there are the lender’s charges such as discount points, administrative costs and other minor fees. Other costs are Recording fees and if engaged, an Attorney’s fee, Pro-rated utilities and Property taxes that need to be adjusted for the time between old and new ownership. This adds up to a tidy sum but, it is all worth the trouble if you are ready to finish the transaction. What’s nice about having a realtor is his or her ability to negotiate these costs. Isn’t that nice?