Understanding Closing Costs: What to Expect on Closing Day
Closing day is an exciting milestone, but it also comes with costs that buyers need to be prepared for. Closing costs typically range from 2% to 5% of the home’s purchase price and include fees for loan processing, title insurance, and property-related taxes and services. Knowing what to expect can help you budget and avoid surprises.
Key components of closing costs include lender fees, which cover loan origination and underwriting, as well as third-party expenses such as appraisals and home inspections. Additionally, buyers may need to prepay property taxes and homeowners insurance to set up an escrow account. These costs vary based on location and loan type.
While closing costs can add up, some sellers might contribute toward these expenses by paying for title expenses, for example. Exploring options with your loan officer and realtor can help reduce out-of-pocket costs. Proper planning ensures a smooth closing process so you can focus on moving into your new home.
Have questions about closing costs? An Ellason Mortgage Group Loan Originator is ready to guide you through every step of the home financing process!
