More Than Half of All Buyers Are Surprised by Closing Costs

Have you considered closing costs when planning your finances for your home purchase?  Don’t wait until the last minute and be scrambling for the additional dollars you need to close.  Your mortgage company is required by law to give you a Good Faith Estimate of your closing costs for your mortgage and your title company is always willing to do a sample closing statement for you so you can see how much you will be expected to bring to closing.  Depending on the fees your mortgage company charges your closing costs can be quite high.  Many mortgage companies require you to pay a full year of homeowners insurance and taxes up front in your closing costs and they hold those in escrow to pay them for you.  That can add up to thousands of dollars so be careful!  Read the article below for a better understanding of closing costs and make sure that your Realtor helps you understand the reason for the closing costs.

Courtesy of Keeping Current Matters 2017

More Than Half of All Buyers Are Surprised by Closing Costs | MyKCM

According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.

After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

Bankrate.com gathered closing cost data from lenders in every state and Washington, D.C. in order to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.

More Than Half of All Buyers Are Surprised by Closing Costs | MyKCM

Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. According to Freddie Mac,

“Closing costs are typically between 2 and 5% of your purchase price.”

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.

Remember it is always toasty in Naples and you deserve to know as much as you can about the homebuying process before you get caught.  Give me a call and I will steer you through the rollercoaster ride and out the other side to very happy homeownership!

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