When buying a home, it’s important to have a budget and make sure you plan ahead for certain homebuying expenses. Saving for a down payment is the main cost that comes to mind for many, but budgeting for the closing costs required to get a mortgage is just as important.
What Are Closing Costs?
According to Trulia:
“When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.”
For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater.
Different Lender's Charge Different Fees!
Yes, different lenders charge different fees! Some lenders charge Origination Fees. Some lenders charge Processing Fees. Some offer higher interest rates. Some lenders will offer a little bit higher of an interest rate, but give you a credit to pay for some of your closing costs. These are all considerations when deciding what lender to use. It's important to know you have options! I recommend checking with a couple lenders to make sure you are choosing the best option for you and your needs. It is very important that you trust and feel comfortable with your lender. Buying a home is one of the most important purchases in your life. It's important to have people you trust on your side!
Trulia gives more great advice, explaining:
“There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.
The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.”
As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Check out your options! A good lender will run different scenarios for you. It's important to know what to expect in regards to payment, interest rates, downpayment, and closing costs before moving forward with purchasing a home. That's the first step! If you would like to discuss what you need to do to get prepared to buy a home in the Las Vegas area, reach out to me. I'd love to talk!
Kelly Albright is Broker/Owner of Vision Realty Group and has been in Real Estate for 17 years. She has closed over 700 homes in Las Vegas, North Las Vegas, and Henderson.