Understanding Closing Costs and What They Entail

home closing costs

There are many different expenses that are involved with purchasing a new property, which makes it necessary to get your finances in order and prepare in advance to avoid delays. Closing costs can add up to thousands of dollars and are necessary for paying for the different services you obtain. If you’re new to the home buying process, there are a few facts to understand to ensure that you can set aside money to cover all of the fees.

Meet With Your Lender

When preparing to pay for your closing costs, you’ll need to schedule a meeting with your lender in advance. Finding the best loan officers in Las Vegas is necessary to get all the details and to determine how much money you’re qualified to borrow. They’ll give you an estimate on how much you can expect to pay with the closing costs. Saving a little bit of extra money will also give you extra wiggle room to pay for unexpected fees or costs that come up during the home buying process.

What Is Included With Closing Costs

Closing costs include many different services that you obtain when closing on a home that you’re purchasing. They often include attorney fees, lender fees, the loan orientation fee, appraisal fees, the lender’s inspection fee, credit report fees, points, the document preparation fee, and the mortgage broker commission or fee. The closing costs are typically 2% to 4% of the final cost of the property you’re buying.

Review Your Good Faith Estimate of Closing Costs

You can expect to receive a good faith estimate of the expected closing costs when working with the loan officers. The document is a requirement of the Real Estate Settlement Procedures Act and allows buyers to obtain the information within three days of signing their loan application. You can also get pre-qualified with the lender before looking for homes while also requesting a GFE of estimated charges to ensure you have more time to prepare. (Read on how much to set aside to maintain your home.)