Closing Costs for Buyers
A typical first-time home buyer question is “How much will closing costs be?” Answer: It depends. Let’s check out this realtor.com article that helps to share insight into this popular question from buyers.
Closing costs are part of the purchase of a home, townhome or condo. Typical closing costs can range from 2%-7% of the purchase price.
What can a Buyer expect to pay?
-A fee for the home inspection, which is usually paid directly to the home inspector at the time of service.
-A loan origination fee, which lenders charge for processing the paperwork for your loan.
- A fee for running your credit report.
- A fee to underwrite and assess your credit worthiness.
- A fee for the appraisal of the home you hope to own to make sure its value matches the size of the loan you want.
-A fee for a title search to unearth any liens on the property that could interfere with your ownership of it. Title insurance protects the lender and buyer from claims against the home and property.
-Private mortgage insurance (PMI) is an additional fee that buyers can expect to pay if they can’t come up with a down payment that’s 20% of the purchase price.
-Discount points, or mortgage points, are fees paid right to the mortgage lender in exchange for a lower interest rate. One point is valued at 1% of your mortgage total. It may seem like lot to pay upfront, but doing so will lower your monthly mortgage payment.
- Buyer attorney fees. Mississippi is one of several states that requires homebuyers to hire a real estate attorney to conduct closings.
-Taxes. These will be pro-rated with the Seller. Usually 6 months to a year must be pre-paid in Mississippi because all taxes are in arears. Property taxes are a prepaid expense, meaning they need to be paid at closing and can’t be rolled into your home financing.
-HOA. If there is an HOA, expect them to be pro-rated at closing.
(**Buyer real estate agents are usually paid by the Seller!)
Read more of this realtor.com article to find out ways to get your buyer closing costs waived!