Budgeting For Closing Costs

Budgeting For Closing Costs

Image title

Saving for a down payment in preparation for buying a new home is pretty common knowledge. With the mortgage meltdown, most mortgages that allowed zero down payments disappeared. While FHA and VA loans still offer little to no money down, most potential homebuyers will need to save at least 5-20% of the home value.

Unfortunately, many first-time homebuyers are dismayed to learn that in addition to the large down payment, they also owe thousands of dollars in closing costs that they might not have expected. The national average for closing costs ranges from 2-4% of the purchase price, which adds considerably to the amount of savings needed to buy a home. In addition, while not a closing cost, most lenders also require a savings reserve equal to at least two months of the mortgage payment. Needless to say, it adds up.

Let’s break these costs down.

Closing costs include fees charged by the escrow or closing attorney, as well as costs associated with obtaining a home loan, including:

• Escrow fees

• Title search and filing fees

• Appraisal fees

• Home inspection fees

• Wire transfer fees

• Loan costs – These include what are termed “points”; each point is 1% of the purchase price and is used as both commission for the lending officer and as an upfront fee to reduce the loan interest rate.

These are just a few of the extra costs associate with buying and closing on anew home. It’s important to know these costs ahead of time, so potential homebuyers can save the appropriate amount of money needed to buy a home. Nobody wants to be surprised by unexpected costs and and end up missing out on the perfect property.


Tatiana Mello Headshot
Author:
Phone: 956-242-5130
Dated: December 24th 2020
Views: 65
About Tatiana: ...

Property Search









RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

Inspection Red Flags - Most homebuyers realize that they
Need A Specialized Agent - If you have started a search for a
Sellers Market Consider New Construction Homes - Most of the country is
Budgeting For Closing Costs - Saving for a down payment in

Our Bloggers

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

Mello Properties
2918 S. Jackson Suite 300
McAllen, TX
956-269-9801
956-435-0280