So far, we've gone over how to calculate how much house you can afford to buy. We've looked
at the basic monthly expenses: mortgage principal and interest, real estate taxes,
homeowner's insurance, plus, in many cases, private mortgage insurance.
But before you finish buying the house, there are other typical closing costs. You need to
have enough cash to cover these basic costs plus your down payment. Lenders estimate 3
percent to 6 percent of the loan amount in closing costs. On a $100,000 mortgage that would
be $3,000 to $6,000.
Lots of Little (and Big) Fees:
Closing costs could include:
- Loan application fees and credit report
- Title search and insurance fees
- Lender's attorney fees
- Property appraisal
- Inspections
- Survey
- Recording fees
- Transfer taxes
- Buyer's attorney
- Documentary stamps on new note
- Origination fees on mortgage
- Condominium application fee
- Escrow account balances/prepaids(for taxes, insurance)
Real estate closing practices vary widely from state to state and even county to county.
Where you live will determine exactly what you will have to pay. Even if you are not
required to escrow money for taxes, you may want to set aside this amount to assure that you
will be able to pay those tax bills when they fall due. You can get a good idea of what
applies where you are buying by checking with a few real estate agents and lenders or title
agents.