Don’t let closing costs catch you by surprise!
There are two basic types of closing costs, recurring and non-recurring.
Recurring include the ongoing expenses you will be paying on a yearly or monthly basis like interest, property taxes and insurance.
Non-recurring costs are the one time fees associated with buying a home like the appraisal and escrow fees.
Here’s an estimate to give a general idea of what to expect when you buy a home. Keep in mind, some of these numbers are based on the price of the home. For this example, let’s assume it’s for a $500,000 home.
Notice that the buyer pays no commission to the real estate agent 🙂
|$70||Tax Service Fee|
|$0||Points on the loan|
|$1500||Escrow Fee - $500 base + $2.00 per $1000|
|$250||Loan Tie In|
|$150||Doc Prep Fee|
|$500-$800||Lender's Title Policy|
|$50||Sub Escrow Fee|
|Interest on Loan||Varies depending on closing date|
|Fire Insurance||First Year Upfront|
|Property Tax||Prorated through Escrow|
In this example, the closing costs would be around $4500 + the recurring costs. Keep in mind that in addition to the down payment and closing costs, the lender will want to see that you have at least a couple of months worth of payment saved too.