When you’re buying a home for sale in Jacksonville or one of its suburbs, you’ll have to pay closing costs – but what are they, and how much will they total?
What Are Closing Costs?
Closing costs are the expenses you incur when you buy or sell a home.
What Are Some Examples of Closing Costs?
Some examples of closing costs are:
- Appraisal fees
- Attorney fees
- Credit check fees
- Deed recording fees
- Escrow fees
- Inspection fees
- Loan application fees
- Notary fees
- Prepaid homeowners insurance
- Prepaid interest
- Prepaid private mortgage insurance
- Title insurance
- Title search fees
- Transfer taxes
- Wire transfer fees
How Much Are Closing Costs?
Closing costs typically range between 2 and 5 percent of the home’s total sales price. If you’re buying a home for $200,000, that means your closing costs will most likely be between $4,000 and $10,000.
How to Find Out How Much Your Closing Costs Will Be
On (or right before) closing day, your lender will provide you with a closing disclosure statement. Your closing disclosure statement will outline who is responsible for which costs in the transaction. You can also talk to your real estate agent about what he or she estimates are closing costs will be long before you receive your closing disclosure statement from your lender.
Closing Costs and Fees You Should Understand
While many of the fees involved in your closing costs are self-explanatory, like credit check fees (the fee your lender charges you for pulling a copy of your credit report), some may be a little confusing. Remember, you can always ask your Realtor® or your lender if you have questions – but these are some of the most commonly misunderstood terms.
Mortgage points, which are commonly called discount points, are fees that you paid directly to your lender at closing. These fees allows you to exchange money now for a reduced interest rate over the life of your loan. Some people choose to purchase points in an effort to lower their monthly mortgage payments over time.
One point costs 1 percent of your mortgage amount. That means if you are borrowing $200,000 from the bank, one point will cost you $2000.
Private Mortgage Insurance
Private mortgage insurance, or PMI, is an insurance that your lender will require you to buy if you’re putting down less than 20 percent of your own money to purchase the home. You don’t get to shop around for private mortgage insurance – your lender will choose the provider for you. That’s because private mortgage insurance is not designed to protect you; it is designed to protect your lender in the event that you fail to make your mortgage payments.
You can usually stop paying for private mortgage insurance one to have built a 20 percent equity in your home.
Are You Buying or Selling a Home in Jacksonville, FL?
If you’re buying or selling a home in Jacksonville, we can help you.
Call us at 904-806-4274. We specialize in helping people all over the area move on to the next chapter in their lives, so reach out to us today to find out what we can do for you.