What Are Closing Costs?

Buying

Due to the complicated and highly regulated practice of selling houses and property in the United States, there is more to buying a house than just the down payment and the mortgage. At closing, the title of the house transfers from seller to buyer and fees are associated for processing the application for lending, a fair market value appraisal, having an attorney review the closing documents, escrow fee, covering the cost of actually transporting the documents, having a credit report run, a mortgage insurance premium payment made upfront, origination fee, pest inspection and more.

Many buyers, after the whirlwind and stress of trying to get everything together to buy their dream home, often forget about needing to pay closing costs on top of the down payment and mortgage. Typically, home buyers can expect to pay about 2%-5% of the purchase price of the home as the closing costs. A $100,000 house, by that measure, could cost anywhere from $2,000 to $5,000. Luckily, some of these fees may be negotiable by the terms you agree to with the seller - you might even be able to get the seller to cover the costs entirely (but it wouldn't be wise to count on that completely).

If you have any questions about closing costs that you'd like to talk to an expert with, contact either Emily or Travis McKinney at 865-694-5904.