Costs In Purchasing A House

Reblogger Patricia Kennedy
Real Estate Agent with RLAH Real Estate AB95346

This is one of those posts that I want to bookmark to include in my buyer consultation package.  George does a great job of explaining the costs of buying that often surprise first timers.

Original content by George Souto NMLS #65149

When First Time Buyers are preparing to purchase a home they usually only focused on the funds needed for the down payment, and are surprised to find out there are other funds required to purchase a property.  These other Costs In Purchasing A House can some times cause especially First Time Buyers to become discouraged and postpone their home buying search.  Therefore, it is important to discuss all funds required to purchase a property as early in the process as possible to avoid surprises later on.

The most common costs First Time Homebuyers do not think about are Closing Costs.  Closing Costs not only come as a surprise to First Time Homebuyers, but the total amount of the Closing Costs can be a major shock. Yes, there are ways to cover Closing Costs without the Borrower(s) using their own funds, such as Seller Paid Closing Costs, and Down Payment & Closing Cost Assistant Programs (DAP), but the shock of hearing about these costs for the first time can really be sobering.

I am always prepared for this initial shock, and I know I have to take the time to fully explain these unexpected costs.  When Closing Costs are explained correctly, and Borrowers understand them, and the initial shock normally goes away.  

The bulk of Closing Costs are not Lender Fees.  The bulk of the Closing Costs are third party fees which are mostly fixed fees, and generic to all mortgage loans.  The exceptions would be funds required for escrows, points, title policy, and prepaid interest which fluctuate based on the price of the property. As a result the percentage of Closing Costs are higher on lower price properties than on higher price properties. 

Below is a list of the Closing Costs most common to all mortgages.

  • Application Fee/Processing Fee
  • Appraisal Fee
  • Attorney Fee
  • Title Insurance Feed
  • Flood Insurance Fee
  • Recording Fees
  • Daily Interest Charge
  • Homeowners Insurance
  • Credit Report
  • Flood Certification
  • Escrows:
    • Taxes
    • Homeowners

There could be other Closing Costs which are not part of every loan, and are more loan program specific such as:

  • Points
  • Funding Fees
  • Condo Questionnaire Fee
  • Re-inspection Fee

These costs can easily add up to several thousand dollars regardless of the loan size, because as I stated before most of these Closing Costs are fixed cost.  When First Time Buyers hear about these unexpected Costs In Purchasing A House for the first time it is understandable why it can be really daunting for them.  But as shocking as hearing about Closing Costs can be, finding out about costs they will incur before the Closing can be equally if not an even a bigger shock.  I will cover these costs in a future blog "Up Front Costs In Purchasing A House".



 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or


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Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

You picked a great one to circulate through the minds of Buyers Patricia. There's so much more to the process than meets the eye.

Jul 15, 2016 07:09 PM #1
Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

I just saw this one reblogged so the word is getting out!

Jul 16, 2016 12:24 AM #2
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Kevin, I think most of us do a pretty good job of preparing our buyers for all of the costs, but they can still have some surprises.

Jul 16, 2016 04:55 AM #3
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Kristin, this is one of the more reblog-worthy posts I've run into!

Jul 16, 2016 04:56 AM #4
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

Hi Patricia, this is a great choice for a re-blog, I have been following George for a long time.

Jul 16, 2016 09:02 AM #5
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Patricia thank you for re-blogging my blog and I am honored that you think it is worthy to include in your buyer consultation package.

Jul 16, 2016 11:02 AM #6
William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

There are many costs involved in the finance and then also the closing of the loan.  These need to be disclosed up front

Jul 16, 2016 12:22 PM #7
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Patricia Kennedy

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