Closing costs are one of those items that many homebuyers, particularly new home buyers, do not take into consideration in the buying process or the price of their new home. These costs can add up to thousands of dollars to find the cash to cover the costs and purchase their dream house, leaving the home buyer scrambling. In certain cases, the purchaser may be liable for a portion of the price, but mostly the buyer will pay the bulk of the fees. Here are some of the more common fees that home buyers should know about before entering into a contract associated with closing costs.
Fee for Assessment
This is the expense of buying a new home priced at the existing market price. The bidding wars on homes can escalate dramatically in a market for sellers and there is an assessment fee to help protect the buyer. In certain situations, if the price of the house exceeds the value of the home, a bank may not grant a mortgage. In the event you default on the loan, this is to secure the bank as well. Appraisal fees normally amount to a few hundred dollars.
Charge for Testing
Each new home ought to have an inspection. This offers details about the condition of the home to the buyer and lender. Inspectors will inspect the home from top to bottom, including objects that look for things like exposure to water, damage to termites, issues with the roof or problems with the foundation. The results of this method may influence the appraisal fee or even the bank’s willingness to loan any money. Usually, the expense of an inspection is a few hundred dollars.
Fees for Loan Origination
Chances are that you will need to take out a loan or a mortgage for your home purchase unless you come to the table with all the cash. There are fees associated with home loan servicing that are equal to a percentage of the overall loan. This fee is not a fixed fee and may differ depending on your credit score and other variables.
This fee is paid to do the requisite background work to ensure that the home seller is the rightful owner of the home, that there are no home liens, back taxes and that the lines of property are correct. You would definitely want to know before buying the property if there are any inconsistencies. Normally, this fee is about $100.
The Insurance Title
To have title insurance, any home that carries a mortgage is required. This guarantees that you and the bank are safe if there are any legal problems concerning the building. This is a one-time fee that is supposed to be charged by buyers while buying a house. Typically it is a couple of thousand dollars.
Deed Fees for Recording
These charges cover the expenses of registering your new home purchase with the county on your behalf. Usually, the rates are under $100.
Fee from Escrow
These payments include the money charged for their services to the title company and any solicitor fees involved in carrying out the title quest and title insurance. Their payments are a proportion of the overall cost of a home that is somewhere below 1.5 percent of the total home purchase price.
We offer a mortgage calculator for homebuyers to help you manage the home buying process. As you begin the process, this will help get you started on your home buying journey and provide some general information. For more detailed details about your home buying priorities and needs, we also suggest you talk with one of our loan officers. We look forward to successfully making your home purchasing process a success.