Admin
Before you buy a home, it’s important to plan ahead. While most buyers consider how much they need to save for a down payment, many are surprised by the closing costs they have to pay. To ensure you aren’t caught off guard when it’s time to close on your home, you need to understand what closing costs are and how much you should budget for.
People are sometimes surprised by closing costs because they don’t know what they are. According to Bankrate:
“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 . . .”
In other words, your closing costs are a collection of fees and payments involved with your transaction. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:
Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical, too. According to the Freddie Mac article mentioned above, the costs to close are 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 cover your closing costs.
Let’s say you find a home you want to purchase for the median price of $366,900. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,500 and $18,500.
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.
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.”
Work with a team of trusted real estate professionals to understand exactly how much you’ll need to budget for closing costs. An agent can help connect you with a lender, and together your expert team can answer any questions you might have.
It’s important to plan for the fees and payments you’ll be responsible for at closing. Let’s connect so I can help you feel confident throughout the process.
Edge Realty was founded in 1990 in the waterfront community of Edgewood, Rhode Island, inspired by the richness of the architecture and the quintessential Ocean State coastline. With a background in the arts, we took our creativity and strategic thinking into Real Estate. Since then, Edge Realty opened its South County and Newport locations, and has continued to expand; now operating throughout Rhode Island, Massachusetts and Connecticut, with referral partners worldwide. With three strong decades of sales in all aspects of real estate, from first time buyers to luxury homes, Edge Realty has sold thousands of properties- including one-of-a-kind architect designed homes, historic time pieces, and whimsical beach cottages. We bring the Art of Real Estate to you – with a Creative Edge.
Stay up to date on the latest real estate trends.
October 5, 2024
September 30, 2024
Protecting Your Home with Confidence: The Essential Home Security System Features.
September 30, 2024
Unlocking the Secrets Behind Desirable Neighborhood Features.
September 20, 2024
OCTOBER 13 & 16–20, 2024
August 30, 2024
August 29, 2024
Transform Your Living Space with These Innovative Smart House Features.
August 29, 2024
Illuminate Your Life: The Transformative Power of Natural Light in the Home.
August 23, 2024
August 8, 2024
Understanding how the age of a home affects its market value.