Understanding Closing Costs
Buying a Fort Wayne home can feel like a very overwhelming process with a number of moving parts. Do you know all that you need to know to buy your first Fort Wayne home? Have you remembered to factor in closing costs? Do you know what closing costs entail?
Before entering the closing process, you need to know as much as you can about the Fort Wayne home buying process and what it takes to close a sale.
Below are three keys to understand about closing costs.
What are Closing Costs?
Closing costs are paid at the completion of the Fort Wayne buying process; this is the same time that the title of the property will be transferred to you.
Lenders and third party service providers charge you various fees that will need to be paid along with your down payment, interest or principal associated with your specific mortgage.
How Much are Closing Costs?
How much money you will spend on closing costs is hard to estimate up front but you should prepare for them to be somewhere between 2 and 5% of what you are actually paying for the Fort Wayne home.
Keep in mind that while a lender is required to give you a good faith estimate of your closing costs within three days of your loan application submission, these can change up to 10% by the time all is said and done.
You can typically pay your closing costs by financing them into your loan or in cash along with your down payment.
What’s Included in the Closing Costs?
The list of expenses that can be included in the closing costs can change depending on the Fort Wayne home’s location and your mortgagor. Settlement service fees, lender fees, and escrow costs can all be included in the closing costs.
There are a number of fees that can fall under settlement service fees including: title services, appraisals, flood certifications, title insurance, home inspections, attorney fees and various other administrative things associated with finalizing the sale.
It’s important to understand just what goes into closing costs along with what and when you will be expected to pay. If you don’t fully understand these costs then sit down with your lender to have the entire Fort Wayne home buying process explained to you.
Closing costs are unavoidable, and while they can be minimized or lowered you should always factor them in when figuring out your loan and what you can afford up front before you pick out your next home.