The homebuying process can be a long road but the payoff is so rewarding! Yet before you can enjoy all the great amenities your new property has to offer, you will have to close on the house. Many people believe their purchase is complete when the seller accepts their offer, but there are additional costs to consider.
During a real estate transaction, the closing phase is when you receive the title to the property, wrap up any paperwork and finish paying any expenses. Here are some fees you should factor into the total cost of buying a home.
1. Appraisal Fees
Appraisal fees are paid to the company who determined the market value of the home and property you’re purchasing. These fees are typically charged by the lender to the borrower as a closing cost. The amount paid will depend on the location and company used.
2. Loan Fees
There are a few different costs included in loan fees. Credit score is crucial when trying to get approved for a mortgage and the cost of pulling your credit report from the three bureaus will be included in your closing costs. Once approved, you will have to pay for the application fees to cover the documentation of the new mortgage.
One of the largest fees included in closing costs is the origination fee, which covers the lender’s administrative costs. Usually, a lender will charge one percent of your total loan amount to process your mortgage loan.
3. Inspection Fees
A home inspection will be required before you’re able to close on a property. A licensed inspector will examine the physical structure and systems of the house to find any violations. The cost of these fees will depend on the location, size and age of the home.
4. Title Fees
To determine the owner of the property, a title search is required. This search through public records for any ownership discrepancies will cost a fee that varies based on location. You may also want to include Owner’s Title Insurance to protect yourself against any future claims.
5. Property Taxes
You will need to pay property taxes when closing on a home. This will help fund things like local schools, services and road upkeep. What you owe will vary based on multiple factors, such as location and property size.
6. Attorney Fees
A real estate attorney is required when purchasing a home in Connecticut. These professionals help prepare and review the paperwork and documents needed throughout the entire transaction. As attorney fees can vary greatly depending on the complexity, they are important to incorporate into your closing costs.
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