When you buy a home, there will be additional factors that impact the overall price. In short, you can’t assume that the asking price includes the entire cost of the transaction. Along with saving for a down payment, first-time homebuyers should set aside some extra funds to make sure they’re prepared for any other expenses.
What Are Closing Costs?
Here’s a brief overview of some common closing costs:
- Property taxes
- Loan origination fees
- Lender fees
- Homeowners insurance
- Title insurance
The good news is that many of these can be negotiated. As a first-time homebuyer, it’s understandable to feel a little overwhelmed by some of these expenses, especially if you didn’t budget for extra costs. That’s why you should work with a qualified real estate agent who will explain each of these costs and help you make informed decisions.
Who Pays for Closing Costs?
The Buyer pays the majority of closing costs, but you can work with the Seller to negotiate some of these expenses (commonly known as Seller concessions). However, Buyers should know that there are limitations to what Sellers can cover. The amount that a Seller can contribute will be affected by the type of loan the Buyer uses.
How Much Can I Expect to Pay?
On average, you should expect closing costs to end up being 2-5% of the mortgage’s value. For example, if you plan on purchasing a home for $285,000, you should plan to pay $5,700 to $14,250 in closing costs. To keep this transaction as cost-effective as possible, it’s best to pay for these costs as a one-time expense. If you’re still feeling unsure of what to expect, rest assured that your lender is required to outline all closing costs in your loan estimate.
Discover gorgeous Nashville homes in welcoming communities by working with HND Realty LLC. We empower Buyers and Sellers by providing knowledgeable advice and resources to make the journey to the next chapter of your life seamless, cost-effective, and above all, enjoyable. Learn more about our real estate services by calling our office at (615) 297-7711.