When you are buying a home, in most cases, you will need to make a down payment and pay closing costs. Both of these are upfront costs that are due at closing time. But what exactly are closing costs? What do they consist of?
Common Types of Closing Costs
Here are some of the most common types of closing costs:
- Application fee
- Appraisal fee
- Attorney fee
- Closing fee
- Courier fee
- Credit reporting fee
- Discount points
- Escrow funds
- FHA mortgage insurance
- Flood certification
- HOA transfer fee
- Homeowners insurance
- Loan origination fee
- Lender’s title insurance
- Owner’s title insurance
- Pest inspection fee
- Prepaid daily interest charges
- Private mortgage insurance
- Property taxes
- Rate lock fees
- Recording fees
- Survey fees
- Tax monitoring fees
- Title search fees
- Transfer tax
- VA funding fees
Not every mortgage is going to include every one of these closing costs. Depending on the specifics, however, you can expect them to be in the range of 2-5% of the purchase price of the home. Sometimes, the seller can pay the closing costs as well (all or a portion). In that case, you may not need to pay them.
Remember, your down payment is separate from your closing costs, and will need to be paid in addition to them.
Move Into Your Dream Home
Now you know a bit more about what to expect from closing costs when you buy a home. If you still have more questions about closing costs, we can answer them in detail during your mortgage consultation.
To get started now, please call us today at (248) 788-0800 to schedule your consultation. We can help you buy a home or refinance in Michigan or 15 other states.
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