Buying a house is an exciting process. While you might have spent a great deal of time figuring out how much you will pay each month and thinking about what kind of loan that you need, you may have forgotten one other cost in your excitement – the closing costs. These costs can quickly add up, and they can make a huge difference in how much money you need when you are getting the funds together to buy a house. Learning what will go into the closing costs, as well as how you can cut down on those costs, is a great way to make sure that you save as much money as you can.
What are Closing Costs?
Closing costs are the charges and fees that you pay when you buy your home. When you close – signing all the paperwork and taking possession of your new home – you will have to pay a number of parties in order to get everything done. Some of these charges can be avoided with careful planning, while other charges are going to have to be paid regardless of your attempts to save money. Figuring out which charges are unavoidable is your first step in paying less.
What Charges go into Your Total Closing Costs?
There are quite a few costs that go into closing. Some of these costs are fairly easy to predict – loan origination fees and the fees paid to your real estate attorney are fairly easy to predict, for example. You may also have to pay fees for your appraisal and inspection, fees to have your credit score run, fees for underwriting, fees for a survey and even fees to have the new title recorded. Other fees include title insurance and research fees, as well as escrow fees that might include property taxes and your mortgage insurance.
How Much Will You Pay in Closing Costs?
Closing costs will always vary by the home and by the buyer. The average buyer in South Carolina is going to pay about $3,700 on a $150,000 home, assuming that closing costs are split between the buyer and the seller. In some cases, those fees could go as high as seven thousand dollars, but are rarely lower than three thousand dollars.
How Can Home Buyers Avoid Closing Costs?
If you are looking to avoid closing costs, the place to start is with the seller. If you can convince the seller to take a larger share of the costs, you can often reduce your own fees. Many sellers who are looking to sell a home quickly will choose to pay the closing costs instead of missing out on a good offer. You can also save a great deal of money by looking for lenders who will charge less to underwrite and originate your loan. In fact, the simple act of closing at the end of the month will reduce the interest that you pay to any lender and will help you to save a bit of money.
Buying a Home in Charleston, SC
Closing costs are a part of buying a home, but not something that should make or break a purchase. You can always negotiate with your lender and seller to reduce costs, and you can make sure that you find a way to reduce costs in areas like inspections and surveys. Your closing costs should always be as low as possible – and all it takes to lower them is to do a bit of work ahead of time.