Apr 23 2009
Closing costs and seller credits
First-time buyers often on a tight budget look at the list price of a home and forget a key point: If you purchase a $400,000 home, it will cost MORE than $400,000 if a loan is part of the package.
Why is this? Closing costs. Lenders will charge a "commission" (broker fee/loan origination fee), various preparatory fees, appraisal fee and then you have the title company. The title company charges escrow fees, notary fees, document preparation fees, and the big ticket item — title insurance. Then you have transfer taxes and fees (roughly $1.10 per $1,000) for the county in which the property is located plus city taxes if applicable.
So that $400,000 home becomes more like a $412,000 home.
