According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.
After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.
“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”
Bankrate.com gathered closing cost data from lenders in every state and Washington, D.C. in order to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.
Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. According to Freddie Mac,
“Closing costs are typically between 2 and 5% of your purchase price.”
Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.
ALTA: Your long home-buying journey is almost over. You found the home you love, the seller agreed to your offer and now it’s time for closing. Of course, there’s a lot to think about right now, and the last thing you want is something to go wrong. So make sure you work with an experienced closing agent to help ensure the details come together and everything runs smoothly.
As soon as the seller accepts your offer, the behind-the-scenes work begins. You can expect closing to happen within 30 to 90 days.
1. Select a Closing Agent
If you are working with a real estate agent, with your permission, he or she may place an order with a closing agent as soon as your sales contract is accepted. The closing agent can be a title company, an escrow company or a settlement company.
Most homebuyers rely on their real estate agent to select a closing agent—someone they work with regularly and know to be professional, reliable and efficient. However, you can choose your own closing agent if you wish. The closing agent will oversee the closing process and make sure everything happens in the right order and on time, without unnecessary delays or glitches.
2. Draw up an Escrow Agreement
First, a contract or escrow agreement is drafted, which the closing agent reviews for completeness and accuracy. The agent will also put your deposit into an escrow account, where the funds will remain until closing.
3. Title Search is Conducted
Once the title order is placed, the title company conducts a search of the public records. This should identify any issues with the title such as liens against the property, utility easements, and so on. If a problem is discovered, most often the title professional will take care of it without you even knowing about it. After the title search is complete, the title company can provide a title insurance policy.
4. Shop for Title Insurance
There are two kinds of title insurance coverage: a Lender’s policy, which covers the lender for the amount of the mortgage loan; and an Owner’s policy, which covers the homebuyer for the amount of the purchase price. If you are obtaining a loan, the bank or lender will typically require that you purchase a Lender’s policy. However, it only protects the lender.
It is always recommended that you obtain an Owner’s policy to protect your investment. The party that pays for the Owner’s policy varies from state to state, so ask your settlement agent for guidance before closing.
5. Obtain a Closing Disclosure
Your lender must provide a Closing Disclosure to you at least three days prior to closing. Your lender may also have a closing agent provide the Closing Disclosure to you three days before you close your transaction.
If you or your lender makes certain significant changes between the time the Closing Disclosure form is given to you and the closing, you must be provided a new form and an additional three-business-day waiting period after receipt of the new form. This applies if the creditor:
If the changes are less significant, they can be disclosed on a revised Closing Disclosure form provided to you at or before closing, without delaying the closing.
6. The Finish Line: Prepare for Closing
As closing day approaches, the closing agent orders any updated information that may be required. Once the closing agent confirms with the lender and the seller, he or she will set a final date, time and location of the closing.
On closing day, all of the behind-the-scenes work is complete. While you’ve been busy packing, ordering utilities and coordinating the movers, your closing agent has been managing the closing process so that you can rest assured, knowing all the paperwork is in order.
Bathroom Remodels… Here’s What’s HOT!
Need some inspiration for your bathroom remodel? Take a look at this year’s hottest projects:
What Does the Future Hold for Neighborhoods?
Residential life could soon be changing. From affordable housing to hyper-local food, the future of neighborhoods can be viewed across multiple sections.
Buyers Expected to Flood Existing Home Market.
New homebuyers may rush the market to take advantage of mortgage rates while they’re low.
Architectual Digest has named St. Petersburg one of the “Top 5 Design Destinations for December,”
St Pete joins such fashionable cities as Havana, Cuba; Buenos Aires; Berlin and San Sebastian, Spain.
New Kitchen Construction and Color Trends in 2016.
New kitchens tend to have granite countertops, raised panel wood cabinets, and come with a standard set of appliances, such as cooktops & ranges, microwaves, dishwashers and garbage disposals. New kitchens also have white, multi-colored, or wood-based color themes, and are complemented by “stainless steel” appliances.
Did you know that Quicken Loans now offers 1% down mortgages?
They’ve been flying under the radar with its 1% down mortgage, which it began nearly six months ago.
Have a Lower Credit Score? Apply For a Mortgage.
It seems illogical: Lenders say they’ll now approve loans to buyers with lower credit scores, but the average score of people actually approved continues to rise.
There’s no reason to be a no-show in the home purchase market if you know where to target your application.
BREXIT: What’s the FIXIT for U.S. Home Buyers and Sellers?
The UK’s exit from the EU almost certainly guarantees interest rates will remain low (and possibly go lower) over the next few months. The cost of money may never be better for a potential buyer.
Why 2016 could be the year Canadians start buying more US vacation homes…
Home prices are rising faster in Canada than they are in the US, and the National Association of REALTORS® says more Canadian buyers will snap up stateside vacation properties as a result.
The Age Old Question: Rent or Buy?
Potential home buyers must decouple “investment” from “consumption” in order to make the best decision for themselves.
5 Ways to Prepare for Rising Interest Rates
With mortgage rates creeping up, the window for refinancing is starting to close
Builders are seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten. http://bit.ly/18IVUmX