Closing Costs for Buyer: What You Need to Know

buyer closing costs

Closing costs for a buyer are a significant consideration when deciding to buy a house. Before panicking or changing course, it’s critical to gather the information you need to understand the process and the costs. We’ve got what you need to know.

What Are Closing Costs?

Understanding closing costs is essential to reducing the stress that can come from  buying a home. Mortgage closing costs are the fees the lender charges to close on your loan. The fees cover the costs incurred by the various entities involved in the purchase of a home, including fees for:

  • Application
  • Courier
  • Attorney
  • Escrow
  • Credit report
  • HOA transfer
  • Origination
  • Title search
  • Taxes
  • Recording
  • Underwriting

How Much Are Closing Costs?

Closing costs on a mortgage loan typically range from 3% to 6% of the purchase price of the property. You will know the total cost when you get to the closing, however. Your lender must provide you with a loan estimate that includes closing costs. The numbers might change slightly between the time you complete the application and the closing. Three days before your closing, you’ll get a closing disclosure from your lender that includes the final costs.

Can You Reduce Closing Costs?

You can reduce closing costs by shopping around and comparing lenders, title companies, and homeowners’ insurance companies. Each will have a different fee schedule, and you could save on your closing costs by choosing one over another.

Understanding closing costs for first-time home buyers can make your head spin. The good news is you don’t have to sort it out alone. A reliable and knowledgeable lender can help you navigate the process. Reach out to the experienced team at Midland Mortgage Corporation for all the mortgage loan information you need.

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