If you're not expecting it, closing costs can cause quite a sticker shock! Talk to your Realtor and lender about what you can expect.
What are closing costs?
Closing costs are made up of a variety of fees involved in your real estate transaction. For buyers they can include loan fees, title and escrow fees, and prorated taxes and insurance. For sellers, they can also include real estate commissions. The total amount is paid out of pocket at closing, and is added to the amount of your down payment. It can cause sticker shock when you realize at the end of the transaction that you will need thousands more than you had planned on. Loan fees are usually around 1% of the purchase price, so from there your Realtor can give you a good estimate on what you're looking at.
What are your options for paying closing costs?
If you don't have a lot of cash on hand, it's pretty common to work closing costs into the negotiations so that the seller credits an amount toward that cost at closing. One way of doing this is increasing the purchase price in exchange for a credit toward the buyer's closing costs. To the seller, the bottom line remains the same, but to the buyer, it means more money in your pocket that you can put into your new property. Some loan programs will allow you to wrap up the amount of closing costs into your mortgage. Then, rather than paying cash in a lump sum, you're paying on it over time, with interest.
Your Realtor and your lender can provide an estimate of your expected closing costs. It's good to keep your total budget in mind when shopping for a home.
Call Ocean Equity today to get started! 541-265-8303
1107 SW Coast Hwy Newport, OR 97365
Serving the Central Oregon Coast