Don’t forget the closing costs

Often first time home buyers are caught off guard when the go to close their first mortgage. Even your realtor may forget to tell you about the closing costs of a home mortgage. It’s something they assume you know about or just forget to mention. Unlike a $100 fee a car dealer may try to throw in a the last minute, mortgage closing costs will be several thousand dollars.

How much can you expect to pay for closing costs? It can vary several thousands but typical fees include items such as Discount Points, origination points, appraisal fee, application fee, credit report, title search and title insurance, survey fee, flood certification recording, and transfer charges, attorney fees, interim interest and finally an escrow account must be setup. These closing costs can reach up to $10,000 or more!

Now you can see why closing costs could actually be a deal breaker for some eager first time buyers. Many times buyers don’t even have a down payment large enough to cover closing costs. Imagine how disappointing it would be to walk into a lenders office with $10,000 ready to close a mortgage loan, only to realize your entire down payment is going to be eaten up in fees. Not a single dime will be applied to the principal amount of the loan.

So, before you get too excited about closing your mortgage loan, be aware of all the fees you will have to pay. It may sound depressing, but if you are prepared for these fees going into the mortgage it won’t be so bad. Owning your own home is a big step so do your homework and you’ll be happy with your decision.