
What Are Closing Costs?
Introduction
Closing costs are an essential part of the home-buying process. Understanding these fees can help you budget accurately and avoid surprises at the closing table.
Common Closing Costs
· Appraisal Fees: Typically $500-850, covering the cost of evaluating the property's value.
· Title Insurance: Protects against legal issues with property ownership, usually around 0.5% of the purchase price.
· Attorney Fees: Legal assistance for closing, ranging from $500 to $1,000.
· Loan Origination Fees: Charged by lenders for processing the loan, usually 0.0% to 3% of the loan amount.
· Home Inspection Fees: Generally $350-650 covering the cost of inspecting the property for structural issues.
Prepaid Costs
· Property Taxes: May need to pay a few months’ worth of property taxes upfront.
· Homeowner's Insurance: Usually requires the first year's premium to be paid at closing.
· Mortgage Insurance: If applicable, you might need to pay upfront mortgage insurance premiums.
Miscellaneous Fees
· Credit Report Fee: Typically $75-150.
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