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Budgeting for Closing Costs

August 5, 2021

Be Prepared for Closing Costs

Saving for a down payment in preparation for buying a new home is common knowledge. With the mortgage meltdown, most mortgages that allowed zero down payments disappeared. While FHA and VA loans still offer little to no money down, most potential homebuyers will need to save at least 3.5 – 20% of the home value.

Unfortunately, many first-time homebuyers are dismayed to learn that in addition to the large down payment, they also owe thousands of dollars in closing costs that they might not have expected. The national average for closing costs ranges from 2-4% of the purchase price, which adds considerably to the amount of savings needed to buy a home.

Let’s break these costs down – Closing costs include fees charged by the escrow or closing attorney, as well as costs associated with obtaining a home loan, including:

  • Escrow fees
  • Title search and filing fees
  • Appraisal fees
  • Home inspection fees
  • Wire transfer fees
  • Loan costs – These include what are termed “points”; each point is 1% of the purchase price and is used as both commission for the lending officer and as an upfront fee to reduce the loan interest rate.

These are just a few of the extra costs associate with buying and closing on a new home. It’s important to know these costs ahead of time, so potential homebuyers can save the appropriate amount of money needed to buy a home. Nobody wants to be surprised by unexpected costs and end up missing out on the perfect property.

Contact our Preferred Lenders to discuss your options for a New Construction Home. Whether you are buying a brand-new one-of-a-kind design or creating your own, they can help you determine the best options for your needs.

Don Blaize – CMG Financial
Area Sales Manager / Loan Officer
NMLS 184888 | Branch NMLS No. 1594850
Mobile: (228) 493-0313
dblaize@cmgfi.com
cmgfi.com/mysite/Don-Blaize
925 Tommy Munro Drive | Biloxi, MS 39532

Catherine Riemann – Supreme Lending
Senior Loan Officer
NMLS No.881455
Primary: (228) 357-9590
Mobile: (228) 357-9590
Catherine.Riemann@SupremeLending.com
LoansbyCat.com
1611 24th Avenue Suite A | Gulfport, MS 39501

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This post was written by Acadian Homes