First-Time Homebuyers Closing Costs

First-Time Home Buyers Closing Costs if not explained upfront could land as a big surprise for many home buyers.

Closing costs could be as much as 4-6% of the home's purchase price. Hence, if you are a first-time homebuyer who are looking to purchase your home ranging from $150,000-$200,000, your closing costs could vary between $6,000-$12,000.

closing costs?

Sounds scary? Yes, it could be and it is very understandable to get easily turned off by these numbers and run away from pursuing your first home.

BUT you should not drop your dream of owning a home just because of the four-digit closing costs. First, let me summarize and talk a bit about the closing costs.

Typical Closing Costs are categorized into Loan Costs and Other Costs.

LOAN COSTS

1.Origination Charges

• Application Fee
• Origination Fee
• Processing Fee
• Underwriting Fee

2. Services Borrower Did Not Shop

• Appraisal Fee
• Credit Report
• Flood Certification
• Mortgage Insurance Premium

3. Services Borrower Did Shop For

• Title: Courier Fee
• Title: Abstract or Title Search
• Title: Lender's Title Insurance
• Title: Settlement Fee

OTHER COSTS

1. Recording Fees

• Recording Fees (Deed and Mortgage)

2. Prepaids

• Homeowner's Insurance Premium (12 months)
• Mortgage Insurance Premium (__ months)
• Prepaid Interest
• Property Taxes

3. Initial Escrow Payment at Closing

• Homeowner's Insurance
• Mortgage Insurance
• Property Taxes

These costs could be overwhelming for first-time and repeat homebuyers.

Do First-Time Homebuyers or Homebuyers in general have to wait until they have saved up for closing costs?

The answer is NO. Your Realtor who is well-versed in negotiating the closing costs with the sellers could explain how this could be incorporated into the purchase price.

However, make sure that you as the first-time or repeat homebuyers know that you still have to come up with your Earnest Money Deposit and the cost of Home Inspection which could run up to $650.

For a personal consultation, you can contact your local Realtor Maria Gilda Racelis of Home Buyers Realty. You can call her at 860-995-9473 or email at mariagracelis@gmail.com. Visit her website www.hbrsales.com.

This article is brought to you by Maria Gilda Racelis. Your First-Time Homebuyers Specialist!