What are closing costs?

You’ve saved up for your down payment and you’re ready to buy your home – or are you?  One of the biggest mistake first-time home buyers make is that they forget they need closing costs.

Closing costs typically range between 2% and 5%, and may include ANY of the following:

  • Appraisal
  • Attorney fee
  • Closing fee or escrow fee
  • Courier fee
  • Credit report
  • Escrow deposit for property taxes and mortgage insurance
  • FHA upfront Mortgage Insurance Premium (MIP)
  • Flood determination or life of loan coverage
  • Home inspection
  • Homeowners Association transfer fees
  • Homeowners’ insurance
  • Lender’s policy title insurance
  • Lead-based paint inspection
  • Loan discount points
  • Owner’s policy title insurance
  • Origination fee
  • Pest inspection
  • Prepaid interest
  • Private mortgage insurance
  • Property tax
  • Recording fees
  • Survey fee
  • Title company title search or exam fee
  • Transfer taxes
  • Underwriting fee
  • VA funding fee

Can someone else pay my closing costs?

In some cases, you won’t have to pay for all or even any of your closing costs.

Ask your lender about:

  • Grant opportunities – available specifically for closing costs
  • Seller concessions – in busy markets, some sellers may be willing to help you out to meet a deadline
  • Financing closing costs – some types of loans will allow you to finance all or some of your closing costs