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How Much are the Home Buyers Closing Cost?

 

Buyers might not be aware of the fees included when purchasing a home.  Buyers closing costs are a collection of fees and payments made to a variety of individuals and organizations who are involved with your transaction. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting Fees

Estimated closing cost/fees are typically between 2% – 5% of the sales price of the home.  Closing cost on a $300,000 house may be between $6,000 and $15,000 in addition to the down payment.

 

Common Closing Costs for Home Buyers

Below are descriptions of common fees and cost you may find when buying a home:

 

Loan Origination Fees

Loan origination fees are the charges due to the lender or bank after the creation of a new loan. Fee amount is typically 1% , $3,000 on a $300,000 home.

 

Discount Points

Discount points are a type of prepaid interest that may be purchased upfront to reduce the interest rate charged by the bank.  These fees are charged by the lender/banks.

 

Appraisal Fees

Appraisal fees cover the cost for a professional appraiser to come out and provide an opinion of the home’s value for your home loan.  Fees are between $500 – $1,200.

 

Title Insurance

Title insurance is a type of indemnity insurance offered by title companies that insure against losses resulting from defects in the title, such as liens, outstanding taxes, mortgages, and violations belonging to previous owners. Rates for title insurance are set by the state of Texas – $300,000 home is $1,886.

 

In addition, there are fees for title search and escrow fees, the estimated cost is $500 – $800.

 

Prepaid Costs

When a buyer gets their loan, the lender usually requires prepayment of property taxes and insurance at the closing.  Your lender will share this information with you via The Good Faith Estimate that is provided within 3 days after loan application.

 

Survey and Elevation Certificate

The survey fee pays for a surveyor to come out and show the exact boundary, location, and legal description and the Elevation Certificate provides the homes Base Flood Elevation, a component to determine flood insurance cost.  $800 – $1,300.

 

Credit Report Fee

This is a fee for pulling your credit report – typically around $50 to $60.

 

Other Costs to Consider

Homeowners insurance

Homeowners Insurance is important to protect your asset.  Insurance cost is based on home location, size, type, and other key factors.  Another type of insurance is Wind and Flood insurance for Brazoria and Galveston counties.   The estimated Insurance cost for flood, wind, and fire on the gulf coast for a $300,000 home is between $5,000 – $8,000 per year.

 

Property Taxes

Property taxes are a large source of funding for the city, county, and state governments. The taxes are determined based on the assessed value of the property. Property taxes are negotiated with the different boards, councils, and legislatures meet to decide the appropriate rates. – Estimated cost on $300,000 home is $6,000 – $8,000

 

It is important to understand the total cost of purchasing a home.  Your local coastal agent will be able to provide cost estimates and provide you contacts to help you with your home purchase.

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