Real Estate Queensland

What closing costs should I expect?

What are closing costs? What all does this include? If you are confused because of this, you are not alone. There are lot of home buyers who think that these costs are not very important and can be taken care of, but do not be mistaken, these are important. If not careful, these could break the deal and cost you a whole lot more than you imagine.

As the finalization of the deal comes closer, there are a lot of things that you, as a home buyer, need to be ready for, and closing costs are one of them. The good faith estimate that the agent produces in front of you contains all details of expected closing costs. The escrow account that has been opened once you sign the pre-sales contract shall take care of most of your closing costs. But, the costs that you are to bear individually have to be taken care of from your end.  There are certain non-recurring costs like mortgage down payments that you need to be ready with, and these amounts are pretty huge. They can work upto ten percent of the purchase amount. Some recurring costs like insurance payments and property taxes are those which you will need to pay every annum.

A few other closing costs that are expected to be paid are:

• Some banks insist on a thorough inspection of the house and hence inspection fees will have to be paid.
• The appraiser who does a financial appraisal of the house will also have to be paid his fee.
• Payment to title company: Title Company plays an important role in the deal and is of paramount importance. They are the ones who research into the ownership details of the property and even check if there is any litigation or regulatory issues connected with the property. They shall submit a bill at closing which has to be honored.
• Some lending institutions insist on termite inspection, as termite problems have been found to be a large destructor of homes in certain states. This also entails a fee.
• There are also several bank related charges which shall have to be borne by the mortgagee. These include – Loan application, loan processing and under writer fees.

One of the cleverest ways to proceed to ensure that you do not get surprised at the long list of payments that may crop up at closing is to have regular meetings with your attorney and agent. They shall be able to guide you on how to arrange for funds and how much to arrange for as well. Closing costs are an inevitable part of the entire deal and hence, no banks or institutions can avoid this totally.

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This entry was posted on Monday, June 29th, 2009 at 18:11 and is filed under Uncategorized . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.