Budgeting for buying a home can seem daunting, but one of the best ways to make it easier is to figure out the average closing costs for buyer hopefuls. There are various service charges bundled together to make up closing costs, and some can vary significantly based on location and specific property.
Here are some of the most common closing costs you can prepare for:
Mortgage lenders charge an origination fee for creating the loan. This closing cost varies from one mortgage provider to another, but usually ends up being equal to about 1% of the total amount of the loan. While this is considered a closing cost, some lenders require this fee up front for the loan estimate.
Home inspection fees typically cost a few hundred dollars. They cover the optional – but important – official property inspection by a licensed professional before closing.
While technically not always required by lenders or buyers, home inspections can help you identify major issues or repair needs before buying a home.
Appraisal fees are paid to the professional home appraiser to determine the value of the property. These fees often range from $300 to $400, though the cost can vary depending on location and the size of the home.
Before a buyer can take over the title for the new home, it has to be examined carefully for any evidence of prior issues. Examples of issues a title search looks for include liens, unpaid property taxes or unfulfilled contingencies. Typically, the fee for a title search will cost around $400 to $500.
These are not all the possible closing costs associated with buying a home. However, they are some of the most common, and the easiest, to budget for. Remember these fees when planning a budget to include average closing costs.
Lana Harris is a Chicago native who is a second-generation real estate professional. She was introduced to real estate at a very young age while attending open houses with her mother who is a broker. She honed her skills assisting in property searches (back in the thick, Multiple Listing Service book days,) and using map reading skills to help plan property tour sequencing. Lana’s love of working with people and delivering strong customer service led her to the retail sector, where she developed her management skills at MC Sports, Ann Taylor, and Adidas. She and her husband moved to Utah in 2008 to enjoy the natural beauty of the mountains, and she began her real estate career here in 2015. Most recently, she was a VP of sales for a large team; she thrives on challenges and is determined to overcome obstacles to achieve results for her clients. Lana and her husband enjoy their three large dogs, skiing, camping and paddleboarding.
