Closing Cost Guide For Buyers:
Below is a simple example of what buyers can expect to pay in closing costs. Each state and locality is unique in the fees that are charged and costs can vary. But, generally, buyers can expect to pay 2-5% of the purchase price of the home in closing costs.
***Remember that closing costs do not include the remainder of your down payment***
If you are taking out a conventional 80/20 mortgage on a home purchase of $250,000, you will need to have $50,000 for the down payment. In most cases you will put down a good faith deposit, or escrow, of 2-3% of the purchase price, depending on what your Realtor advises, when submitting your offer. The remainder of the down payment will need to be paid at the closing table ($50,000 - $7,500 = $42,500).
If you are purchasing your home through a FHA loan, your down payment will be significantly less as FHA loans only require 3.5% down or $8,750 of a $250,000 home purchase. However, the fees associated with an FHA loan may be higher, so the closing costs will be higher.
Take Away: When you are starting the process of purchasing a new home, it's extremely important to make sure you are preparing your finances so you have a competitive advantage.
Stay tuned tomorrow for Closing Costs for Buyers : Part 3!
Amanda McNew
(772) 663-2823
amanda@movetovero.com
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