Closing Costs – Home Affordability

As soon as you decide you want to buy a home, it’s a good idea to start stashing away cash. In addition to your down payment, you’ll have to account for closing costs. Closing costs can range between 2 percent and 5 percent of the home’s total sale price.

What Charges Are Included in Your Closing Costs?

Most people don’t know exactly what they’re being charged for when it comes to closing costs. While every transaction is different, closing costs typically include things such as:

  • A loan origination fee (the cost of processing your loan paperwork)
  • Attorney’s fees
  • The fee for pulling your credit report
  • Charges for inspections
  • Discount points (if you have chosen to pay fees in exchange for a lower interest rate)
  • A survey fee
  • An appraisal fee
  • Title insurance
  • Title search fees
  • Escrow deposit
  • A recording fee
  • An underwriting fee

How Much Will My Closing Costs Be?

Because closing costs are generally between 2 percent and 5 percent of the home’s purchase price, your closing costs will vary.

If your home cost $200,000, for example, you could pay between $4,000 and $10,000 in closing costs.

Within a day of closing, your lender will give you a HUD-1 statement. The HUD-1 statement outlines your closing costs. You’ll compare that to your good faith estimate—the document the lender gave you within three days of applying for your loan—and make sure that the costs haven’t risen more than 10 percent (that’s the maximum allowable by law).

In some cases, the fees that go into your closing costs are negotiable. If some things seem exorbitant, ask your lender to remove them; you can always find another lender willing to work with you if your current lender won’t budge.

Most people plan for closing costs while they’re saving for a down payment. (Not sure how much you need? Read “How Much Do I Have to Save to Buy a Home?”.)

Ready to Find the Perfect Sonoma County Home?

Call me at 707-869-1884 . I’d love to help you find the perfect space in a Sonoma County neighborhood that you love.



Are You Ready to Buy a Home

How Much Do I Have to Save to Buy a Home

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