How To Calculate Closing Costs Before Buying A Property

Dated: 03/28/2018

Views: 79

Image titleWhen buying a house, the only cost we consider is the mortgage amount. We tend to forget about various other expenses. On an average, you will spend 3%-5% of your home price on closing costs. For a house, worth $200,000; you will pay $6,000-$10,000 on closing costs which is a hefty amount.


How to Calculate Your Closing Costs?


Property Insurance:

The lending institution requires you to purchase a homeowner’s insurance plan. You will also need to invest in the lender’s insurance. If you pay less than 20% for down payment, you must also pay the PMI.

Title Insurance:

It protects you if there are legal issues with the title of your house. The title insurance may cost up to 1% of your property value.

Mortgage Expenses

Expect to pay 1%-3% of loan value for processing charges, loan origination fees, and attorney charges. The lender may require you to pre-pay home insurance, property taxes, and mortgage payments for a few months. The money will be saved in an escrow account. Lenders require this sum to ensure that you have enough money to pay the mortgage. The bank will discuss the mortgage-related expenses before you sign the contract.

Flood Certification

In some areas of the country, you will also pay for the flood certification. The fee can be $50 or more depending on your region.


Feel free to contact me for information on how to lower the amount of closing costs you pay! We have a solution to make closing costs minimal for you...

Latest Blog Posts

Jumbo Loan With Out The Jumbo Red Tape One Lender I Know Removing The MI With Low Down Payment

So....I have a lender guru friend that has a package deal for larger home purchases.  As prices continue to raise, it only benefits to educate yourself on some or all of the options.  Most

Read More

Escalation Clause To Win A Home Or Is It Even Worth It

What is an escalation clause?It's Buyer 1 saying I will pay X amount of dollars above your highest offer. Buyer 2 is at 250kBuyer 3 is 255kMeans at the end of the negotiations we are paying X

Read More

Have You Heard Of Temporary Buy Downs

Temporary buy down of the current interest rate is a great way to get a home you want to become affordable.  Ease into the larger payments.Here's the example which isn't too far from where we

Read More

The 5 Key Components Of A Credit Score

There are five key components of a credit report that affect your overall score. 1. Delinquencies-  Making your payments on time is important for having a good credit score. This is 35% of

Read More