Before making the decision to buy a home, it’s important to plan for all the costs you’ll be responsible for.
What Are Closing Costs?
A recent article from Bankrate explains: “Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”
Simply put, your closing costs are the additional fees and payments you have to make at closing.
How Much Are Closing Costs?
According to Freddie Mac, they’re typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to budget.
Let’s say you find a home you want to purchase at today’s median price of $384,500. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,690 and $19,225.
But keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.
Make Sure You’re Prepared To Close
Freddie Mac provides great advice for homebuyers, saying: “As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”
Planning for the fees and payments you’ll need to cover when you’re closing on your home is important. Partnering with a local real estate professional can give you the guidance and confidence you need throughout the process.
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