Do you know what all the buyer closing costs terms are? First time homebuyers (and buyers that haven’t been in the market in a long time) may be surprised by all the costs associated with purchasing a new home.
You need to be aware of all the costs that will come along with the lovely writer’s cramp associated with owning their piece of the American dream. Some folks only think about the down payment and mortgage payments, but there is so much more. Save up, folks, because you’ll need all your pennies to close on your new home!
Without further ado, here’s the list of terms that you need to be informed about:
| Type of Fee | Approximate Cost | Description |
| Loan Origination Fee | Usually 1% of the loan amount – depending on loan type | Charged by the lender for processing the loan. |
| Discount Points | 1 point is 1% of the loan amount – depending on loan type | Charged by the lender to buy down interest rate |
| Credit Report | Around $35 | From credit reporting agency to ascertain the buyers payment history |
| Appraisal Fee | Around $475 for conventional loans – varies depending on loan type and lender | Charged by the appraiser to estimate the value of the home |
| Private Mortgage Insurance (PMI) | Fees vary depending on % of down payment | Required to offset possible foreclosure on loans <20% down |
| Home Inspection | Around $500-$800 | Depends on size of home |
| Termite Inspection | Around $75-$100 | Required by lender to be certain home is free of termites |
| Mechanical Inspection | Around $150-$200 | Optional: checks home operating systems |
| Structural Inspection | Around $250-$500 | Optional: checks on the structural condition and integrity of the home |
| Survey | Around $300-$400 | Required by lener to verify demensions, easements and encroachments |
| Attorney Fee | Around $700-$1,000 | Charged by closing attorney to process paperwork, perform title search and record title |
| Recording Fees | Around $50 | Charged by municipality to record legal documents that transfer title of property |
| Title Insurance | Tiered based on purchase price:
$2.45/$1000 for the first $250,000 $1.91/$1000 for $250,001 – $500,000 $1.25/$1000 for $500,001 – $2,000,000 $0.96/$1000 for $2,000,001 – $7,000,000 |
Protects buyer from loss sustained by back taxes, liens or encumbrances |
| Home Insurance | On average, around $900/year | Insures your home’s structure and your belongings in the event of a destructive event |
| Prepaid Interest | Cost varies based on when loan closes during month | Interest charged at closing for the day of closing plus any days left in the month of closing |
| Real Property Tax | Cost varies by municipality | Pro-rated at settlement for tax bill issued Sept. 1st |
| Due Diligence Money | Cost varies based on list price, house condition, desirability | Paid directly to seller at time of offer. Will be credited toward purchase price at settlement |
| Earnest Money | Cost varies based on list price, house condition, desirability | Held in a trust account and credited toward purchase price at settlement |
| Home Owners Association Dues (HOA) | Amount varies by community | Pro-rated if pre-paid |
| Home Warranty | Around $400-$600 | Optional: service agreement that covers the repair or replacement of many major home system components and appliances that typically breakdown over time due to normal wear and tear |
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If you are interested in finding out how I can assist you with your real estate needs, click this Calendly Link to book time for us to chat.
Relocating to the Cary area? Click here for the Cary Relocation Guide.
Thinking of selling your home? Click here for the Seller’s Guide.
Learn More:
- Click here to learn more about the Due Diligence Fee.
- Click here to learn more about the Earnest Money Deposit.
- Click here to learn more about the benefits of having a buyer’s agent.
- Click here to learn more about the benefits of having a seller’s agent.
Happy Home Buying & Selling In North Carolina!
