When buying a home, it’s important to have a budget and make sure you plan ahead for certain homebuying expenses. Saving for a down payment is the main cost that comes to mind for many, but budgeting for the closing required to get a mortgage is just as important.
When you close on a home, a number of fees are due. They typically range for 2% to 5% of the total cost of the home, and can include title insurance, originations fees, underwriting fees, document preparation fees and more. For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees.
It is important to read and understand the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—the Cal Yoder Team will be a great resource for getting you all the answers you need.
As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Work with your lender and the Cal Yoder Team to be sure you have everything you need to land your dream home.