Calculating Closing Costs

An unexpected bill is the last thing buyers need at closing time.

When you purchase a home, there are various fees charged by lenders and third parties that you’ll be responsible for at closing time. It's important to anticipate the closing costs so you aren't blindsided by an unexpected bill.

Your mortgage and down payment will cover the price of the home but it’s critical you proactively factor in the extra fees involved in buying a home. Some common closing costs are:

1. Appraisal Fees - Necessary in order to arrange financing.
2. Title Insurance - Required by banks to assure a clean title.
3. Legal Fees - These vary depending on the complexity of your individual situation.
4. Taxes/Fees - There could be various transfer fees and taxes to pay depending on your situation.
5. Mortgage Insurance - Necessary unless you have a large down payment but it can usually be worked into the mortgage.

This is by no means a complete list as closing costs vary depending on your situation but they usually represent somewhere between two to four percent of the purchase price. You’ll also want to allow for post-closing costs which may include connection fees, insurance, minor repairs and maintenance.

It’s easy to overlook closing costs when you’re in the throes of house hunting. Buying a home can be an emotional roller coaster but you'll definitely enjoy a smoother, less stressful ride if you're aware of what lies ahead. For a more accurate estimate, it’s best to discuss your individual circumstances with a local expert so please don’t hesitate to get in touch.