Mortgage closing costs are costs to either the seller or the buyer of transferring the title of a home from the seller to the buyer. These costs are in addition the home price.
A down payment is an amount that you have to pay the day your buy your home. But did you know there are other fees you have to pay as well. These are called closing costs and are fees charged by lenders, appraisers, attorney’s, real estate agents, and title insurance companies.
Let’s say you by a home for $200,000 and make a $20,000 down payment (10%). That means you’ll need to borrow $180,000 to make up the difference ($200,000 – $20,000). That just pays for the cost of the house. There are other people that are helping with the transaction including the attorney, the surveyor, and the appraiser. You’ll pay for these services as well when you close on your home. These are all detailed on the 2nd page of your Loan Estimate.
When you are deciding how much home you can afford, its important to take mortgage closing costs into account. Try our easy to use calculators to help zero in on a home price target.
Selling your house quickly can eat into your home price appreciation because these transaction costs can be so high. That’s why Bundle recommends you live in your home for at least four years.
Read more on your down payment here.
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Read more Key Mortgage Terms.