In addition to the down payment a borrower may have to pay closing costs, and inspections fees. It’s a great idea to have a conversation with your agent and your lender early in the process to know how much money will be needed to complete a purchase.
When reviewing costs with a borrower, I break them into two categories- loan related and home related.
Loan related items are not necessarily being paid to the lender, but are incurred because of lender requirements. For example, an appraisal is required by the lender and therefore the borrower must pay $400-$500 to obtain one. The money doesn’t go to the lender, but is considered a loan related fee.
A typical transaction with the Heath Team has 3 loan related fees-
- Our fee- which is around $0-$1100 depending on the type of transaction.
- Appraisal fee for the determination of value
- Title/Escrow fees for managing the transaction and insuring the buyers get a clear title with our loan in the first position.
Home related items are usually property taxes, hazard insurance and HOA fees. Whether a buyer gets a loan or not, they still have to pay for these expenses.
You may, and we recommend you do, opt for additional home inspections and those fees are not typically a part of closing costs estimates since they are optional services.
When you consider a home purchase, we will sit with you and calculate the total estimated funds you will need for down payment, loan and home related costs.