Closing Costs: What Will You Have to Pay When You Close a Home Loan?

Published by julia | Filed under Buyer / Seller Tips, Listings, Miscellaneous, Real Estate, Shout Outs

Many would-be homeowners are shocked to find out that they need to bring additional money beyond the down payment to the closing table. Sometimes, they don’t discover this until the day before the closing, putting them in a difficult spot, as closing costs can run into the thousands of dollars. In fact, the typical amount of closing costs is 2 to 4 percent of the cost of the loan. If you’re getting an FHA loan, which requires a 3 percent down payment, this can actually cause you to have to save up twice that much to close the loan!

Why are there closing costs. Well, the title company and lender need costs to cover certain things such as the lender’s commission, title fees, recording fees, and any pre-paid items on the closing list. When you get pre-approved for a loan and get an offer accepted on a house, you should immediately get your lender to send you an itemized list of closing costs so you won’t be left out in the cold come closing time. You want to be aware of just what’s coming. If you don’t have the closing costs, you won’t be able to close on your loan.

Of course, you can always ask the seller to pay the closing costs for you. In this rough economy, with people desperate to sell their houses, you may find this is easier to negotiate than you thought. Sellers will give just about any concession to get their house off of their hands. You can also ask that the lender roll the closing costs into the total amount of the loan. This will raise your monthly mortgage payment, but it may mean the difference between you being able to get the house and not being able to get it. Usually, lenders are quite lenient about this and will typically be willing to work with you on getting the closing costs covered in some way so you can move into your new home.

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