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Tips to not get blindsided by closing costs

Categories: New Homes in Raleigh | Posted: June 13, 2019

If you are on the journey to finding a new home in Raleigh and this will be your first home, chances are that you are learning everything you need to know about buying a home along the way. You may be relying on Google to define all of the mortgage lingo as you search for a lender, or calling your parents or Realtor every other day to ask them questions you may not know the answers too. However, the one thing you need to be educated on beforehand is knowing what your closing costs will be once you find the perfect home. Royal Oaks Homes, a division of Mattamy Homes, shares what you need to know about closing costs so you are not caught off guard and a dollar (or thousands) short in the end.

When it comes to buying your new home, most buyers have a set budget on what money they have available to purchase the home. Apart from the actual cost of the home, you have to put aside cash for a down payment, occasionally inspector visits, and of course your closing costs. If you don’t know the terms or breakdown of what your closing costs look like, it can make all of your new home dreams go bust.

So what is the best way to plan for your closing cost fees?

A good rule of thumb is to budget anywhere from 2% to 5% of the purchase price of your home. This fee goes to lenders, attorney’s and other third parties who may have been involved in the transaction. Buyers often have more closing costs than sellers because most fees are related to the new mortgage loan.

Common items that will make up your closing cost as the buyer will be the loan processing fees, home appraisal and inspection fees, and property taxes.

If you are the seller, your costs will cover mortgage payoff fees, title transfer fees, and attorney fees for handling the closing.

If your closing costs come up higher than you have budgeted, there is good news. You can shop around for the loan estimate portion from your lender. The loan estimate will detail the services and you can shop around on the surveys, appraisals and search titles to see if you can save some money that way.

Also, closing costs are negotiable. Sometimes the seller or buyer agrees to pay all or part of the other party’s closing costs.

Some lenders will allow you to roll the closings costs into your mortgage as well, if need be. However, just remember that is additional money you will have to pay interest on for the remainder of your home loan so it is best to have cash available.

If you have more questions on buying your first home or need help in finding a home that works with your budget, contact our new home professionals today who can help make your dream home also pencil out with your dream budget.

 

Mattamy Homes, formerly Royal Oaks Building Group, is a new home builder in Raleigh, North Carolina. For additional information about Royal Oaks building your Raleigh new home, please call (888) 677-1502.

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