Buyers and sellers should be prepared to show up to the closing of a home sale knowing what their costs of sale will be. Based upon the mortgage loan amount of the purchase and sale price, a Bay Area mortgage broker will be able to estimate closing costs on both sides. It will be important to ask your mortgage broker for an estimate on the closing costs for buying a home. Once you have a set deal with a closing date for the purchase of a home, you should know your ballpark costs close to the penny. So, if you are first time home buyer, here are the details that you need to know about closing costs.
Buyers Have a Specific Number of Costs
In a closing, both San Ramon home buyers and sellers will have costs. Typically, a buyer will have more line-item expenses than the seller. To begin with, most people purchasing a Bay Area home are acquiring loans to make the purchase, and the bulk of the charges will stem from the loan.
The individual purchasing a Danville house should receive a loan estimate form in the initial stages of the sale process. This document will list out the estimated costs that the buyer will encounter when purchasing an Alamo home. This document will ensure that a buyer does not encounter any surprises at closing. Your Bay Area mortgage broker may use the details on the loan estimate to shop for different lenders, interest rates, and costs.
Likely, buyers getting a mortgage will see some of the following costs:
- Appraisal fee
- Origination fee
- Credit report fee
- Recording fee
- Notary fee
- Bank processing fee
Make sure to ask your mortgage broker to go through these fees in an itemized fashion with you in order to understand precisely what they are and how they apply to your loan. A Danville mortgage broker should specify which expenses are pro-rated and paid at the time of closing.
When buying a Bay Area house, consider coming up with an extra one or two percent toward closing costs. This can be a bigger deal than a price reduction in the purchase amount, so ask the seller to assume some of the closing costs as a part of the negotiation.
Sellers Pay the Commission
Although sellers pay more, there are always fewer line items on an estimated closing statement for them. The seller usually assumes the larger cost of the fees which are wrapped up in the real estate commission. The commission is based upon a percentage of the total sale price, which tends to be the most substantial fee. A seller may also have to pay the remainder of their property taxes or any prorated homeowner’s association dues.
Educating yourself about closing costs will provide you with very helpful information when going through the purchase of a home. Your local mortgage broker will be the perfect asset when it comes to deciphering the costs so that you can buy the perfect home.