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Closing costs and how much you should pay

Diane Muchmore HomeSmart Fine Homes and Land discusses closing costs in PrescottYou are now in the market for your dream home and you have calculated what you can budget with your mortgage, insurance and taxes. You even have a good idea what your interest rate will be, as you have already been pre-approved to go shopping. But, has your realtor gone over the reality of closing costs with you? Diane Muchmore of HomeSmart Fine Homes and Land, your trusted Prescott realtor, explains closing costs and what you should know and expect.

Closing costs are those fees that are paid out to third parties that are part of the transaction (realtors, attorneys, lending, etc). You can expect to pay anywhere from two to seven percent of the purchase price. Please do not let these costs take you unaware.

Examples of Closing fees you should expect:

Expenses to securing a mortgage
•A loan origination fee from the lender you will be working with.
•An underwriter fee. An underwriter determines if you are creditworthy.
•An appraisal fee.
•A flood certification fee.
•Credit report fee.
•Interest that may accrue prior to your first payment.
•PMI fees, only if you pay a down payment of less than 20%.
•Points, which you can choose to pay the lender to lower your overall mortgage rate.

Other Expenses  
A title fee.
•A title search fee, to uncover any liens on the property.
•A notary fee.
•Owner’s title insurance.
•Attorney fees.

Inspections
•Any home inspections to check for problems, including pest, water and the home itself. Remember some areas may require different inspections.

Municipal expenses
•Taxes. Of course, there are taxes!
•A recording fee.

You should get a closing fee disclosure from your lender to outline and make you aware of all of these prior to closing. It may be possible for some of these fees to be negotiated, as well. Make sure you have a realtor who is experienced and has a good understanding of the closing costs and the different pieces involved. Having the right realtor can make all the difference in the world when buying a home and perhaps some negotiation opportunities.

Prescott is such an amazing place to decide to buy a home. In the midst of all your excitement, don’t forget closing costs and how much to budget. Diane Muchmore of HomeSmart Fine Homes and Land can certainly help you to understand more about what to expect with closing costs. If you have questions about Prescott area real estate or you’re in the market for that ideal home, call Diane Muchmore at 928-925-5113.

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