When purchasing a property, everyone knows you need a down payment, but many people don't realize that in addition to your down payment, more funds are needed to cover your closing costs. Closing costs are fees that can include title insurance, tax and utility reimbursements, land transfer tax, and miscellaneous smaller fees for services like notaries and wire transfers. If you are getting a mortgage, your lender could also charge appraisal, underwriting and application fees.
How much should you budget for closing costs? I typically tell my buyers to budget anywhere between 2.5-4% of the price of the property.
A breakdown of these fees will be given to you by your real estate Lawyer prior to closing.
As interest rates continue to rise, it's more important than ever to make sure your plan includes budgeting for closing costs. Keep in mind that these fees vary depending on new or resale, location, loan program, and lender.
If you're thinking about buying and wondering what your total out-of-pocket cost might be, send me a message I would be happy to put together an estimate for you!
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