Helping to demystify the closing process, one question at a time.
The home buying process is very stressful. No part of it is more stressful than the period of time just before closing on the house. This is the last chance for something to go wrong. The idea of being ill-prepared for closing costs has been a frequent stressor for some of our clients.
However, stress no more because we’re here to answer your questions and give you some peace of mind!
What are Closing Costs?
Being prepared for closing costs, means understanding. Finalizing on a mortgage comes with a variety of fees and payments that you pay when it’s time to close on the mortgage.
Typically these fees include:
- The appraisal and survey fees
- The loan origination fees
- The first year of your homeowners insurance
- The first six months advance of property taxes
- Attorney fees
- Escrow fees
- Discount/Mortgage points
- And other miscellaneous fees
How do I Estimate my Closing Costs?
In any case, the closing costs are typically 3% to 6% of your mortgage total. So for a $100,000 mortgage you can expect to pay anywhere from $3,000 to $6,000 in closing costs. The CFPB (Consumer Financial Protection Bureau) requires that your lender provide a Loan Estimate (LE) within three days of the application to you so you can use this to base your 3%-6% estimate.
Initially, your lender will provide you with a Closing Disclosure three days before you close on the house or property. This Closing Disclosure is an itemized list with all the specific fees and expenses that make up the closing costs for you. At this stage, it’s important to take a moment to compare the Loan Estimate with the Closing Disclosure and address any unexpected changes.
How to Pay Closing Costs
If payment is unspecified on the Closing Disclosure, don’t hesitate to ask your closing agent by what means they want these to be paid. More often than not, it is by a certified check.
However, if you’re a first time home buyer, or purchasing the home through the aid of a FHA loan, there are programs and grants that may be available to you. While the specific amounts of what’s covered may vary from place to place, they offer a good overview on their website.
Did We Answer Your Questions?
Overall, closing can be a complicated and nerve wracking process. As you prepare to close on your new house, remember we are experts in the field of Georgia Real Estate Law. If you have any questions or concerns don’t hesitate and give us a call! Reach out to us with your questions. We’re here to help.