RE/MAX Advantage I



Posted by RE/MAX Advantage I on 2/13/2020

Closing costs are usually an unavoidable part of buying a home. While there are ways to reduce some closing costs and fees, they are an expense you will likely have to consider when it comes time to save for a home.

On average, buyers can expect to pay between 2 and 5 percent of the purchase price in closing costs and fees.

In this article, we’re going to break down those costs and talk about some ways to plan for, or limit, the fees associated with closing on a home.

A breakdown of closing costs

Most closing costs in a real estate transaction are paid for by the buyer. When getting approved for a mortgage, your lender is required to provide you with an estimate of the closing costs. This is called a “Closing Disclosure statement” which overviews the details of your loan.

Different lenders will charge varying amounts in fees. Some are even willing to waive certain fees. But, we’ll discuss that later.

For now, let’s focus on the closing costs buyers typically have to pay:

  • Attorney fees - a flat-fee or hourly rate depending on the attorney

  • Origination fees - an upfront fee charged by the lender for processing your mortgage application

  • Prepaid interest or discount points - a payment for the interest that will accrue on your mortgage from the time you close until your first mortgage payment is due

  • Home inspection fee - the fee that a professional home inspector charges to inspect a home

  • Escrow deposits - Usually split with the seller, this is the fee charged by an escrow agent

  • Recording fees - fees for legally recording the new deed and mortgage

  • Underwriting fees - fees paid to the lender for researching your mortgage case and determining whether or not to approve your application

These are just some of the many fees that can be due upon closing on a home. Depending on where you live, which lender you choose, and the type of mortgage you secure, your closing costs will vary, so it’s a good idea to shop around for a lender and mortgage type with reasonable closing costs.

Reducing closing costs

Some lenders offer no-cost, or low-cost mortgages. However, these savings often come with a higher interest rate which, over the lifespan of your loan, can cost you more in the long run.

You should also be aware of the different loan types that you may be eligible for. FHA loans, USDA loans, and VA loans are all designed for buyers hoping to make lower down payments on their home.

Each loan type provides different amounts due at closing. Fortunately, your mortgage lender will be able to give you an estimate of costs for each loan type.

Want to get an estimate of the closing costs you’ll have to pay when you buy a home? You can use this online calculator to see an average.




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Posted by RE/MAX Advantage I on 5/24/2018

Whether you’re buying or selling a home, one of the most important parts of the process is the negotiation phase. This means different things whether you’re buying or selling a home. When you’re selling a home, you’re usually looking to get the most money for your home that you possibly can. If you’re buying a home, you want the lowest possible price for the home. Hence, the reason for real estate negotiations. Buyers and sellers must meet somewhere in the middle. For your consideration, we’ll break down some of the most important aspects of the real estate negotiation process. The Cost Means Different Things As we stated above, buyers want the lowest price, while sellers want the highest price possible for a home. Whatever side you’re on, expect to meet somewhere in the middle. The price of the home has to make sense for both sides. The seller wants the sale of their home to make sense financially and the buyer wants to home to fit into their budget while getting the things they desire out of the home. The Financing Process Is Complicated If you have your mortgage fully approved prior to making an offer, you’ll be able to shorten the closing time of the home. The reason for this is that the preapproval shows that all of the buyer’s finances are in order and there will be no financial problems in the transaction. Sellers often prefer these buyers since they can be trusted to close properly and there won’t any issues with the real estate transaction. The property also won’t be on hold for months on end. The Date Of Closing Matters If sellers need to get their home off of the market fast, they can negotiate when the closing date will be. As a buyer, this matters because the next month’s mortgage payment is skipped once you close on a house. The closing date affects when exactly this payment doesn’t need to be made, which can have a positive effect on your finances when it’s timed right. Closing Costs Are Actually Paid Upfront Escrow is when the mortgage company holds the money for taxes and insurance, which is the prepaid closing costs. Buyers sometimes ask sellers to pay a portion of the closing costs. This could be a flat fee or up to 3 percent of the included mortgage. This could all have an effect on the asking price for the home. Just Like A Car, Homes Can Come With Warranties Buyers can ask for a warranty on the home, or the seller can offer one. This warranty typically covers the home’s appliances and utility systems. This provides a protection if things like the air conditioning or the dishwasher break after a certain period of time and need repair. This may make the home extra enticing to buyers and give sellers an advantage to get their home off the market quickly.





Posted by RE/MAX Advantage I on 3/16/2017

When you close on a home, you’re sealing the deal with all of the agreements that you have made with the seller and your lender over the course of the home buying process. Since most people don’t pay cash for a home, your loan will also close at the same time as the ownership changes. If you are paying cash, the process may be slightly different. Closings can also be called “settlements” since everything is being signed and sealed at this time, essentially, “settling” the deal.


Have Your Checkbook Ready


The closing is where documents are exchanged, the keys are passed on, and all of the funds required to complete the transaction are paid. Closing costs include the down payment that you’re putting on the home, lawyer’s fees, taxes, commissions, assessments, and more. The seller may be writing a check too, paying off the old loan to their former home. You’ll need to verify the amount that needs to be paid at closing clearly before you reach the closing table. The money must be presented at the time of closing in order for the deed to be handed over. 


Get A File Folder And Stretch Your Writing Hand


The settlement on a home requires quite a bit of paperwork. You’ll be handed a stack of papers to sign. Take the time to listen to your lawyer or realtor to understand exactly what you’re signing. There’s more papers to sign than you really can imagine! Finally, you’ll be handed copies of all the papers that you put your signature on. It’s important to keep everything for your records. These documents will include everything from proof of insurance to the deed on the property to your loan terms and documentation. 


Where Will The Closing Be?


Depending on where you live, your closing will take place in either the lender’s office or the office of a lawyer who is representing the closing. Typically, it will be the loan company’s attorney who holds the event in this case. In some cases, closings can be what is known as “witness only.” This means that a notary or attorney will be present at the chosen closing location to provide documents. The drawback to this type of transaction is that nothing that you’re signing will be explained to you.


What Happens Following Closing?


When all the I’s are dotted and the T’s are crossed, congratulations! You’re the proud owner of a new property. Unless there has been a prior agreement made with the seller, you’ll be able to take possession of the property right away. Occasionally, there will be some post-closing agreements that involve transactions due to a repair that couldn’t be made or reimbursements for real estate property taxes that were paid on the part of the seller. Ideally, this will all be taken care of at the closing table, but at times other arrangements must be made.




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