It's Important to Budget for Closing Costs

Dated: May 17 2021

Views: 88

Don’t Forget to Budget for Closing Costs

Don’t Forget to Budget for Closing Costs | MyKCM

When buying a home, it’s important to have a budget and make sure you plan ahead for certain homebuying expenses. Saving for a down payment is the main cost that comes to mind for many, but budgeting for the closing costs required to get a mortgage is just as important.

What Are Closing Costs?

According to Trulia:

When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.”

For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater. As mentioned above, closing costs are typically between 2% and 5% of your purchase price. 

Trulia gives more great advice, explaining:

“There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.”

Bottom Line

As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Let’s connect to be sure you have everything you need to land your dream home.

Blog author image

Jason Shafor

Jason is a born and raised Flagstaff native. He has over 15 years of home building experience in Northern Arizona. Jason takes the same blue collar, hard working habits he developed and implements the....

Latest Blog Posts

6 Key Things To Avoid After Applying for a Mortgage

Key Things To Avoid After Applying for a MortgageOnce you’ve found your dream home and applied for a mortgage, there are some key things to keep in mind before you close. It’s exciting

Read More

The Perks of Putting 20% Down Payment on a Home

The Perks of Putting 20% Down on a HomeIf you’re thinking of buying a home, you’re probably wondering what you need to save for your down payment. Is it 20% of the loan, or could you put

Read More

The Average Homeowner Unbelievably Gained $56,700 in Equity over the Past Year

The Average Homeowner Gained $56,700 in Equity over the Past YearWhen you think of homeownership, what’s the first thing that comes to mind? Chances are you might focus on the non

Read More

The 2022 Housing Market Forecast

2022 Housing Market Forecast [INFOGRAPHIC]Some HighlightsWhat does the coming year hold for the housing market? Here’s what experts project for 2022.Mortgage rates are projected

Read More