When most people think about getting a mortgage, they think of expenses such as down payments, mortgage payments, utilities and condo fees. One cost that is frequently overlooked when it comes to purchasing a home is closing costs, which includes the fees that are incurred when the title to the property is transferred to you.
What are some common closing costs?
|Legal Fees||Fire Insurance|
|Appraisal Fees||Home Inspection|
|Property Tax Adjustment||Real Property Report|
|Interest Adjustment||Utility Connection Charges|
How much will my closing costs be?
While this can be highly dependent on your specific situation, a general rule of thumb is to ensure you have 1.5 percent of the total purchase price available to cover these costs. While they may not reach that amount, in the end it is better to have saved more than you need as opposed to scrambling to find the extra funds at the eleventh hour.
For, if you purchased a home for $400,000 it would be wise to ensure you have at least $6,000 available to cover your closing costs.
You should always be sure to budget ahead of time to avoid any surprises once your mortgage is finalized. Questions about closing costs? Leave us a comment below or contact us today.