Today we’re going to find out how much does it costs to buy a home? aka CLOSING COSTS! This question comes up at every single buyer meeting. There is no straight forward answer but we can give you estimates here today!
Click “PLAY” to follow along and learn about closing costs!
This information is a jumping off point and will get you on the right track while planning and saving!
01. Tax prorations and adjustments: The closing atty will collect prorated property taxes from the first of the year to the closing date. These funds are estimated from last year’s tax bill and will be placed in the buyer’s escrow account. They will go towards the tax bill when it is released later in the year.
02. Loan charges: These are charges paid to the lender. Most common loan charges are discount points (aka buying down your interest rate), Lender fees, processing, underwriting, appraisal, doc assembly, and prepaid interest from the first of the month to the closing date.
03. Escrows: These are funds collected by the lender and placed in your escrow account. If your taxes and insurance are paid out of the escrow account held by the lender, they will ask for 3-6 months worth of taxes and insurance to pad the account and get the mortgage moving.
Note: These costs do not include your down payment! These are additional costs paid at closing.
04. Title & Settlement charges: These are charges paid to the title company or closing atty. Most common settlement charges are title insurance binder, buyer and lenders title insurance, title search fee, closing fee, and post closing fee.
05. Government Recording and Transfer Charges: These are one time sales taxes collected by the state and county anytime a home is purchased. In Georgia we have Intangible tax, GRMA, Deed and Mortgage recording fees, and Transfer tax.
Your lender will go over your closing costs with you and ask to wire “total due from borrower”. This amount will be your down payment + your closing costs – any earnest money already wired – any seller concessions. That number will be your final “cash to close”. We like to tell our buyers to budget anywhere from 3-6% of the purchase price for closing costs. Handing them over to the lender for more concrete numbers! Hope this was helpful!
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