When you buy a new home, you need to bring money to closing. This can be a significant amount, so it’s important to talk to your lender in advance to make sure you know exactly what you’re looking at. The cost varies from one purchase to the next, depending on a lot of factors, but you could be looking at thousands of dollars in fees.
If that’s surprising to you, your first question may be what those fees are supposed to cover. Again, it varies from purchase to purchase, but the following are a few of the more common things that may be included:
- The underwriting fee
- The transfer taxes
- The title search carried out by the title company
- The property taxes
- The survey fee
- The home inspection fee
- Prepaid interest
- PMI, or Private Mortgage Insurance
- The origination fee
- Title insurance
- Home insurance
- The courier fee
- An escrow deposit
- The application fee
- The appraisal fee
- And more
Now, you may not see all of these costs at closing. For instance, title insurance is typically optional, so you may not pay for it at all. A home inspection may also be optional, or you may pay for the inspection at the time it is carried out, rather than at closing. The same is true for an appraisal. It all depends on the specifics of your exact case, but it’s important to know what potential fees exist so you can consider everything carefully in advance.
Buying a home is not the time for surprises. Take the time to look into all of the proper steps that you need to take.
