When you buy a home, there are several associated costs that a buyer is responsible for paying. If you are interested in purchasing a home, you will need to budget for the down payment, your monthly mortgage payment, as well as closing costs to finalize your home purchase or a mortgage refinance. If you are interested in buying a home in Mount Pleasant, South Carolina, and want to know about the various costs associated with buying a home, Lucey Mortgage Corporation can help. Read on to learn more about closing costs and how they are factored in when buying a home.
What Are Closing Costs?
Essentially, closing costs are the expenses you must pay when you purchase your home that aren’t included with your mortgage fees or down payment. They are required either when you buy a new home or refinance an existing mortgage. The amount you owe for closing costs will depend on the area that you live and the type of mortgage you obtain, however, they typically range between 2% to 5% of the overall price of your home. Closing costs are paid at the end of the purchase of the home when the title of the property is transferred from the buyer to the seller. Borrowers can take certain steps to help lower the expense of closing costs by comparing the fees of different lenders, asking the seller to cover closing costs in some cases, and by researching to see if there are any available incentives or rebates available for eligible borrowers.
What Fees Are Included With Closing Costs?
Closing costs consist of several different expenses, including:
- Application fee – the cost associated with your lender approving your loan application.
- Origination fee – the underwriting cost charged by your lender in order to prepare your mortgage.
- Title insurance fee – this protects you if another party tries to claim ownership of the property.
- Title search fee – this ensures that there are no other ownership or lien issues with the property.
- Appraisal fee – you will be required to pay for an appraisal of your property in order to determine the value of your home.
- Taxes – You will be responsible for paying taxes charged when the title of the home is transferred, as well as property taxes.
- Homeowners insurance – the cost for the first year is typically paid with closing costs.
- Escrow fee – this fee is for the escrow agent that helps you close on the home.
Get Help Estimating Closing Costs
Buying a home is a major life event, and one that comes with a great deal of financial responsibilities that you will need to be prepared for. If you are buying or refinancing a home in Mount Pleasant, South Carolina, and want help with closing costs, contact Lucey Mortgage Corporation for a consultation.