Purchasing a new home is a lifetime investment a lot of people wish to make. However, buying a home is expensive, as there are several details involved in home sales. Many excited home buyers often become less excited when it’s time to close the deal, and they must bear the closing cost. Many buyers are often unaware of the closing costs of buying a home. Keep reading to learn all you need to know about closing costs.
Closing costs of a house are the fees paid when closing a real estate transaction, and the title deed is transferred to the buyer. Depending on the signed agreement, they can be incurred by the buyer or the seller. The process can be complex and often requires the expertise of professionals such as experienced lawyers and the best realtors in Victoria BC.
All You Need To Know About Closing Costs
Many home buyers, especially first-timers, always want to know how much to budget for the closing costs of purchasing a new home. Interestingly, the closing costs are fees that must be paid when getting a mortgage loan. This includes the cost of the appraisal, credit report, title services, attorney fees, and underwriting fees. It’s often two to five percent of the home cost. Here are five things home buyers should know to have a clearer idea of what the closing would look like.
- Size of the house
- Down payment amount
- Agreements with the bank or seller
- Appraisal cost
- Title insurance
Size Of The House
Many first-time home buyers are often unaware that the size of the house contributes to the amount to be paid as a closing cost. The bigger the house, the more the cost of the appraisal, inspection, and other checks to qualify for a mortgage loan. This will significantly increase the amount to be paid as a closing cost.
Down Payment Amount
The down payment made for the home purchase when getting a mortgage loan also affects the amount to be paid as a closing cost. The higher the down payment, the lower the interest on the mortgage and other fees to be paid.
Agreements With The Bank Or Seller
Another factor that contributes to the closing costs a home buyer bears is the agreement with the bank and seller. For instance, the buyer may have to pay some fees to the bank to cover the loan origination costs. This fee costs an average of one percent of the loan amount. Also, the seller may agree to cover a part of the closing cost. This reduces the amount the buyer would have to pay.
Appraisal Cost
To qualify for a mortgage loan, a home appraisal must be done. The home appraisal is designed to protect the buyer. It ensures that the selling price matches the home’s market value.
Title Insurance
Title insurance is another criterion needed to qualify for a mortgage loan. It protects the buyer from issues regarding the title of the property. Because the house and land have changed hands, it’s possible for ownership issues to come up somewhere along the line. If such issues come up, the buyer will be covered by insurance.
Home buyers that need a realtor to help with their closing cost process can Contact Brad Maclaren, the top realtor in Victoria BC, today. Brad is an experienced realtor in Victoria that has helped many buyers with their closing cost process. Let him help you too! Still looking for that perfect property? Check out our featured listings page for stunning properties in and around Victoria.
