Most Los Feliz Realtors will tell you that purchasing a home involves additional money out of pocket than just the advance payment. Buyers also want money to pay for services rendered.
Our Los Feliz Real Estate Agents say these are generally referred to as closing costs, which are utilized to pay for items such as title policies, recording fees, inspections and courier charges, bookings to set up an impound account and fees that a lender charges. Most Los Felz Real Estate Agents will tell you it is the fees a lender charges to make a loan that typically cost the most.
Closing costs are on top of (in addition to) the purchase price. This can appear as a sudden jolt to many home buyers that are merely taking a look at the amount in their advance payment, especially when the advance payment is quite low. Ultimately, they might not have the extra money to pay the buyer’s closing costs, and without money to close, the transaction might not close at all.
Just How Much A Buyer Can Expect To Pay For Closing Costs
As a guideline, our Los Feliz Realtors say closing costs to get a home run about 2 to 4 percent of the purchase price, with the average around 3% of the sales price.
Much is dependent upon the points and origination fees a lender charges to make the loan, that used to be disclosed on the buyer’s good faith estimate, but today is now called a loan estimate.
The total closing costs to purchase a $300,000 home could cost anywhere from approximately $6,000 to $12,000 or more. Generally speaking, our Los Feliz Realtors say the capital can’t be borrowed because that may raise the buyer’s ratios to a place where the buyer may not qualify for a loan.
Where A Buyer Can Get “Free” Closing Costs
Los Feliz Real Estate Agents say that sometimes, first-time home buyers can get their closing costs paid with a government agency. Based on where you live, it may make sense to check into county or state down payment assistance programs.
Programs that offer buyer’s closing costs assistance often will record an instrument in the public records that offer security for the loan but usually carries a zero interest and has no set date. Moreover, it typically is paid back at the right time of sale or upon a refinance, whichever first occurs.
Non-Recurring Buyer Closing Costs
Los Feliz Los Angeles Real Estate Agents say buyer’s closing cost fees that are paid and not again are called non-recurring. These fees are onetime charges for such things as:
- Title Policies
- Escrow or closing
- Wire fees
- Courier / Delivery
- Attorney fees
- State, County or City Transfer Taxes
- Home Protection Plans
- Natural Hazard Disclosures
- Home Inspection
- Lender fees paid along with the loan to the loan estimate.
- Recurring Buyer Closings Costs
Los Feliz Realtors say recurring fees are the buyer’s closing costs that you’ll pay again and again. They are often fees collected in advance of closing for prepaid premiums and establishing impound/escrow accounts. They comprise such fees as:
- Fire Insurance Premium
- Flood Insurance (if needed on your area)
- Property Taxes
- Mutual or Private Mortgage Insurance Premiums
The duration of the year that you picked will probably dictate just how many pro rate months of premiums the lender will amass to keep against future payments of taxes and insurance.
Our Los Feliz Realtors say not every loan requires an impound or escrow account, however typically loans totaling more than 80% of your purchase price will demand an impound/escrow account.
Our Los Feliz Real Estate Agents suggest that you always consult your lender before you negotiate an offer that calls for a seller credit because the lender might not allow it. Further, they might not allow any changes on your final statement over the final days of closing a transaction.
Los Feliz Realtors say if you are financing 100% of the purchase price, the lender may possibly limit your credit for 3 percent of the purchase price.
Now, depending on your own FICO score and the amount of your advance payment, the lender may possibly allow a seller to credit you as far as 6 percent of the purchase price.
Los Feliz Realtors say lenders will not let a debtor receive cash from a seller at closing, regardless of what you may hear at those no-money-down seminars.