Now is the perfect time to buy a home, its like the perfect storm, all is right: the interest rate are low, so are the prices of homes.
Ready to buy? here is some information you will need to get started:
Buying a home involves more out-of-pocket than just the down payment. There are also closing costs to pay for items such as title policies, recording fees, inspections, courier charges, reserves to set up an impound account and fees that a lender charges. It is the fees a lender charges to make a loan that typically cost the most.
Closing costs are on top of the purchase price.
How Much Are Closing Costs?
As a rule of thumb, closing costs to buy a home run about 2 to 4 percent of the purchase price. Much depends on the points and origination fees a lender charges to make the loan, which are disclosed on the buyer’s Good Faith Estimate.
The total closing costs to purchase a $400,00 home could cost anywhere from approximately $8,000 to $16,000 or more.
Non-Recurring Closing Costs
Fees that are paid once and never again are called non-recurring.
* Title Policies
* Escrow or closing
* Notary
* Wire fees
* Courier / Delivery
* Endorsements
* Recording
* State, County or City Transfer Taxes
* Home Inspection
* Lender fees paid in conjunction with the loan on the HUD-1, line 800.
Recurring Closings Costs – The Prepaids
Recurring fees are those charges that you will pay again and again. They include such fees as:
* Fire Insurance Premium
* Flood Insurance (if required in your area)
* Property Taxes
* Mutual or Private Mortgage Insurance Premiums
* Prepaid Interest
The time of the year that you close will dictate how many prorate months of premiums the lender will collect to hold against future payments of taxes and insurance. Not every loan has an impound or escrow account, but typically loans totaling more than 80% of your purchase price will require an impound / escrow account.
Can a Seller Credit the Buyer for Closing Costs?
Always check with your lender before you negotiate an offer that involves a seller credit because the lender might not allow it.
