What Closing Costs to Expect if You're a First-Time Home Buyer

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
What Closing Costs to Expect if 
You're a First-Time Home Buyer
 
 


     There's a lot of things to learn and know when hoping to become a First-Time Home Buyer.  It can all seem a bit overwhelming ...

     Closing Costs:  Closing Costs are one of the most important things you must know as part of your upcoming transaction and financing.  

     And while everyone's transaction may have costs specific to it (or the locale of the property), there are some costs that are pretty much basic and universal to every transaction.  

     Below is a comprehensive list of those costs charged to most Home Buyers as part of obtaining a mortgage loan.  First-Time Home Buyers should count on these basic costs as part of their fee faced at the consummation of their transaction.

     Those Closing Costs are:

  • Lender Application Fee .. OR .. Appraisal Fee
  • Appraisal Fee (Paid @ Application) If not Application Fee
  • Credit Report (Paid @ Application OR @ Closing)
  • Tax Service Fee
  • Flood Certification
  • Home Inspection (Paid @ time of Inspection)
  • Lender's Origination Fee (Paid@t Closing)
  • Title Fees & Title Insurance (Paid @ Closing
  • First Year's Homeowners Insurance Premium (Paid @ Closing or immediately prior to)
  • Possible Cost:  Homeowner's Association Documents & Questionnaire (If Applicable)
  • Recording Fees (Paid @ Closing)
  • Transfer Taxes (These vary by City, County, State ... and by terms of Contract)  Often paid by Seller.
  • Attorney Fee (Common in Illinois.  Paid @ or after Closing)
     
     The sum total of these items:  The total can be between $4,500 and $6,000, depending on the Vendors used to complete the Services ... and what the Lender charges.  
 
     Please Note:  These costs are in addition to any down payment a Buyer may have to produce to purchase their home.  In some states, portions of these costs are "offset, or credited by the seller", such as Title Fees and Real Estate Tax Prorations.
     
 
     It's important to point out:  If these costs are known in advance of negotiating a price and Contract, a Home Buyer can request a Closing Cost Credit from the Seller of the property.  
 
     Buyers may ask:  That part, or all, of these costs be paid as a credit at Closing to the Home Buyer, (Subject To Guidelines).
 
     The need for Seller-Paid Closing Costs should be determined with your loan officer at the time of Pre-Approval ... not after the offer is made to purchase a home.  
 
     Asking the Seller to contribute to these costs upfront is usually the best course of action.  In these cases, Home Buyers can cover their Closing Costs in part, or entirely, by the Seller, as per the negotiated Contract.
 
     Once again:  The above info and methods are common to the Chicagoland/Illinois area.  Other areas/states may have varying costs/amounts due to local customs and practices.
 
     Bottomline:  It's wise to have a conversation regarding credit, finances, down payment needs, and possible Closing Costs with a Mortgage Lender well in advance of beginning your home search.  
     That way you are educated, prepared, and well-positioned financially for your home purchase and financing ...
 
 
     *  Hoping to buy in New Lenox, Will County, or elsewhere in the greater Chicagoland area?  Contact Me! I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:
 
Gene Mundt
Mortgage Lender  -  NMLS #216987  -  IL Lic. #0006220  -  WI Licensed
American Portfolio Mortgage Corp.
NMLS #175656
 
Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281
 
 
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Roy Kelley 09/27/2015 07:02 PM
  2. Chris Mamone 08/31/2015 04:33 AM
  3. Praful Thakkar 09/22/2015 07:11 PM
Topic:
Lending / Financial
Location:
Illinois
Groups:
Mortgages
1st Time Buyers
Consumer Mortgage Tips
Advice for Buyers
Bananatude
Tags:
buying a home
closing costs
closing fees
real estate contracts
firsttime homebuyer
sellerpaid closing costs
mortgage lender advice

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Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Thomas F. Scanlon ... buyers do need to maintain their records and keep their documentation.  And those closing documents will soon be called something new ... again ...

Shirley Coomer ... you touch upon a very important subject.  The communication needed between lender and agent PRIOR to the contract being written and signed.  So many problems can be avoided, when this occurs.  Great point .. thank you for raising it ..

Gene 

Aug 29, 2015 12:36 AM #11
Rainmaker
5,347,433
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is great information for first time home buyers.

Have a very special weekend.

Aug 29, 2015 03:13 AM #12
Rainer
250,849
Dinah Stallworth-Lewis
Priority Real Estate LLC - 800.978.4847 - Natchitoches, LA
NATCHITOCHES, LA HOMES FOR SALE

Gene,

This is a very informative blog and on point about borrowers closing costs.  I like #5, Shirely's comment.  I agree,  when borrower are working with a good lender early, it also helps the realtor.  It is very helpful to the know what the closing costs needs are when negoiating offers on their behalf.  Another great blog!

Aug 29, 2015 11:09 AM #13
Rainmaker
1,317,476
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

It is important for buyers to have an idea what the closing costs will be -- as well as pre-paids.. Often they don't understand the difference and the total funds they will need.

Aug 29, 2015 12:53 PM #14
Rainmaker
820,093
Maureen Bray Portland OR Home Stager ~ Room Solutions Staging
Room Solutions Staging, Portland OR - Portland, OR
"Staging that Sells Portland Homes"

Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com this is a great explanation for first-time home buyers about what to expect regarding closing costs. Although I've bought numerous homes over the years, I never thought of asking the seller to contribute to them.  Is that a relatively newer practice?

Aug 29, 2015 02:20 PM #15
Ambassador
4,299,501
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com - just wondering, why application fees vary from few hundred dollars to close to thousand with differnet lenders.

Having said that, you know this post is a keeper for me as I correct my hand-out of closing costs (pretty old now). Thanks a lot for identifying 'paid at closing' so buyers really understand it.

Just one note - Home Inspection costs are not closing costs, my two cents.

Aug 29, 2015 03:41 PM #16
Rainmaker
4,432,093
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I hope home buyers will read this post. I will bookmark this and share it with others.

Aug 29, 2015 09:07 PM #17
Rainmaker
1,427,659
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Gene - Nice list of items that could be needed by the buyer during the home buying process! I found it very interesting how different states differ in these costs - for example, in New Mexico, the seller pays many of the costs that buyers pay elsewhere. It's important for buyers to talk to an expert in their area.

 

Aug 29, 2015 11:26 PM #18
Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

True, Richie Alan Naggar ... in order for potential buyers to make wise decisions, they must have a handle on these costs ...

Appreciate your kind words, Tammy Lankford ... glad to hear that the info proves beneficial for you ..

Gene

Aug 30, 2015 03:23 AM #19
Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Thank you, Roy Kelley ... we did!  Our grandchild spent the day with us on Saturday, making it very special ...

 Definitely information that needs to be shared and discussed between professionals, Dinah Stallworth.  It can prove very beneficial to the clients ... and to the successful timing of a Closing ...

Gene 

Aug 30, 2015 03:25 AM #20
Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

We need to provide them with the info they need to make wise decisions, Joan Whitebook ... 

Maureen Bray Portland OR Home Stager ~ Room Solutions Staging ... this is something that has been done in the Chicagoland for quite a while now.  But the responses I've received here prove that this practice can be somewhat regional in nature.  It happens often here ... but is rare elsewhere ...

Gene

 

Aug 30, 2015 03:28 AM #21
Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Praful Thakkar ... Lenders have varying costs of creating and doing business. Just the sheer difference between banks, brokers, mortgage bankers, etc. ... and the costs involved in the running of those businesses.  Same reason rates are different and products cost varying amounts at retailers.  But your question proves why it's so important to educate yourself regarding these costs .. and the differences that may exist between lending institutions and lenders themselves.

Gene   

Aug 30, 2015 03:33 AM #22
Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Thank you, Gita Bantwal ... I appreciate you doing that ...

Obviously, New Mexico has seen the benefit of following this practice, Kat Palmiotti.  As others have noted here, it seems to be somewhat regional in practice.  Something we should be aware of, should we refer or do business in other locales ...

Gene

Aug 30, 2015 03:36 AM #23
Rainmaker
798,009
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Gene - This is just a prime example of why all buyers need to speak with a lender to learn about the lending process, closing costs, getting pre-approved, and how much home they can actually afford.

Aug 30, 2015 04:35 PM #24
Rainer
105,787
Chris Mamone
Keller Mortgage - Tacoma, WA
Senior Loan Officer

Great Post Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com - I've been having this talk with all my clients. They seem to think down payment is it and they dont need anything else. Boy are they wrong! Have a great week!

Aug 31, 2015 04:33 AM #25
Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Sometimes the "advertising" or marketing for these products can be a bit confusing or misleading.  Exactly why we as Lenders have to keep the correct info out there ... often!  Thanks again for the re-post of this info ... it will definitely help, Chris Mamone  ..

Gene

Aug 31, 2015 07:11 AM #26
Rainer
105,787
Chris Mamone
Keller Mortgage - Tacoma, WA
Senior Loan Officer

Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com - Your welcome Gene! Its very valuable information. I think I shared it across my social media platform. Hopefully you'll be getting 100's of views!

Aug 31, 2015 07:14 AM #27
Rainmaker
1,224,854
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Thank you again, Chris Mamone ... I so appreciate your efforts.  Hopefully the info helps AND gets lots of looks ...

Gene

Sep 01, 2015 01:24 AM #28
Ambassador
3,982,858
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

It's a learning process for buyers and this post is a good tool we can share with first time buyers especially. You make it so easy to see and understand, Gene.

Sep 01, 2015 10:43 PM #30
Rainmaker
328,979
Vick The Realtor .
Olympus Executive Realty INC. - Orlando, FL

Congrats on your featured blog, hopefully you can keep them coming, topics that are featured take blogging talent!

Sep 03, 2015 02:17 PM #31
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Rainmaker
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