Your down payment isn’t all you need when you buy a home. Closing costs are expenses beyond the down payment: appraisal fees, title fees, and escrow funds just to name a few, that are paid at the closing of your home.
How much is it? How Closing costs are typically 3% – 6% of the loan amount. This means that if you take out a mortgage loan worth $100,000, you can expect to add closing costs of about $3,000 - $6,000 to your total.
Not every buyer will pay the same amount in closing costs. Every situation and loan is different. There are lender requirements, government requirements, and the type of loan you take out.
Who pays for closing costs? Both buyers and sellers pay closing costs. Be sure to prepare to include this in your budget when you start your home-buying journey.
If you live in a buyer's market, your seller might be willing to help you cover your closing costs as part of their seller's concessions. This can be helpful to make your purchase more affordable, but there are limits with seller's concessions. Come back soon for a blog about this and/or reach out to us for some insight/advice, we're here to help!
As the buyer, you get to choose which mortgage company to work with. At Polaris, we are here to walk you through every step of the home-buying journey. Call us today to get started!