When you prepare to buy a house, there are a lot of different costs that you need to budget for. One cost you may not have thought of initially when looking into buying a home are the closing costs. Whether you were aware of having to pay closing costs when buying a home or not, Team Crescenzo is here to help you understand what you should budget for them!
What Are Closing Costs Exactly?
Before we get into the details on what to budget for closing costs when buying your home, let’s go over what they are exactly. Closing costs are the fees you pay when you close on your new home. Typically the closing costs are about 3-5% of the loan amount, and include fees such as title insurance, attorney fees, taxes, and so on. Paying these costs is one of the final steps in finalizing your mortgage, whether you are purchasing property, or refinancing.
What to Budget for Closing Costs
Now that we have gone over what closing costs are, let’s go over what you should budget for them. As we have mentioned above, closing costs typically end up being about 3-5% of your loan amount. Therefore, let’s say your loan amount is $280,000, this would make your closing costs anywhere from $8,400-$14,000. However, there are ways for you to be able to get these costs down, and we are here to help you navigate this process!
Did you know your closing costs can be negotiated? You could handle the negotiation yourself, but we highly recommend having your real estate agent take care of it for you. It is very important when you begin the home buying process to make sure you have a great real estate agent who can negotiate on your behalf. They can negotiate to have the seller cover a good portion of the closing costs. Who you choose as your real estate agent really makes a difference in how much money you could save when buying a home! If you’re looking for an agent that can help you with closing costs, reach out to us and we’ll refer you to one of the experienced agents in our area.
New Construction Builder
Are you looking into buying a new construction home with a builder? If so, there are ways to save money on closing costs! Many times when you purchase a home from a builder they will offer incentives. These incentives can help you save thousands of dollars. This is where having a great agent comes into play again, as your agent can negotiate additional incentives or concessions with the builder to minimize your out of pocket closing costs!
Here at Team Crescenzo, typically about 60-70% of our borrowers pay little to no closing costs either because they are covered by the builder, or they are negotiated upfront to be paid by the seller. We highly recommend working with one of our preferred agents, and making sure you explore all of your options so you can save as much money as possible when purchasing your new house!