Here is an overview of the typical closing costs you can expect to pay when buying a home. At the end of the article, we have links to more detailed information to learn about the specifics of mortgage closing costs.
Application Fee & Appraisal
If you’re taking out a mortgage to finance the cost of buying your home, you’ll end up incurring a variety of fees. Nearly all lenders will charge a mortgage application fee, which covers the cost of processing your application and all of the necessary paperwork.
You’ll likely have to pay for a professional appraisal of the home as well, as the lender will want to ensure that they aren’t lending you more than the house and property are actually worth.
Inspection & Insurance
If you’re buying a pre-owned home you’ll need to pay for a home inspection to gain an understanding of the home’s condition and if you’ll need to make any repairs in the near future. You’ll also need to purchase homeowner’s insurance on the property to protect yourself in the event that something goes wrong with the home.
If you put less than 20 percent down on the cost of the home, your mortgage lender may also require that you purchase private mortgage insurance; this will vary depending on which state or province you are buying in.
Escrow Fees & Taxes
As with any major financial transaction, you’ll need to satisfy the tax man by paying various taxes on your purchase. These will vary depending on where you are buying your home, but might include sales taxes, property taxes, transfer taxes, recording fees, title transfer fees and more.
If you used a third-party escrow service to manage these fees or to hold your deposit during the closing process, you’ll also need to pay escrow fees prior to signing the final paperwork.
Get The Details
Closing costs for a mortgage are complex, so we have more detailed information for you when you’re ready to get into the details.
- Article: What type of closing costs should you expect to see when buying or refinancing a home?
- Video: Closing Costs You Should Expect When Buying or Refinancing a Home
Most importantly, when you get ready to start looking for a home, meet with your mortgage broker to pre-qualilfy for a home loan and learn more about the closing costs. Marimark Mortgage serves clients in Florida, Virginia, and Pennsylvania, and we would be happy to help you with your mortgage needs.