What Are Closing Costs for Homes for Sale in Montrose, Colorado?
If you are buying a home in Montrose, Colorado, you may be wondering what closing costs are. After all, it’s important that you are aware of all of the costs associated with your purchase, as after saving for a down payment, searching for your dream home, and then applying for a mortgage, they may come as an unpleasant surprise.
So, if you understand what closing costs are, and budget for them, it will certainly make the home-buying process run much smoother.
We believe that everyone should be knowledgeable about what closing costs are! That’s why, here at Glenn Steil Style Real Estate, as Montrose real estate agents, we have gathered some information to assist you with gaining some insight. So, be sure to continue reading to learn more:
· What Are Closing Costs? If you are buying a home, know that closing costs are the fees for the services and expenses required to finalize a mortgage. Whether you are buying a home, or refinancing, you will have to pay closing costs. In general, home buyers will pay between about two and five percent of the purchase price of the home in closing costs.
· Lender Fees. Some lenders will bundle all of their costs together, which is known as an origination fee. However, others will break them up into categories, such as courier fees, appraisal costs, administrative fees, and credit checks, just to name a few. In addition, know that an optional closing cost is a discount point, which is equal to one percent of the loan amount. Also, now that discount points can be used to lower your interest rate.
· Title Fees. The majority of closing costs, about 70%, are title-related. Lenders require buyers to purchase title insurance that covers the lender up to the amount that they have been loaned. In addition, it is also recommended that buyers purchase owner’s title insurance, so that they can protect their own investment in the home.
· Prepaid Costs. Lenders typically require borrowers to set up an escrow, or impound account, to collect homeowners insurance and property taxes. However, if you make a down payment of 20% or more, you may be exempt. In addition, know that another potential prepaid cost is a homeowners association fee, which can be presented if you aren’t moving into a condominium or townhouse community.
· Who Pays Closing Costs? Buyers and sellers are both subject to paying closing costs, as it all depends on their geographic region or state, and the circumstances. In general, sellers typically pay the real estate agents’ commissions at closing, while the buyers usually pay for loan-related expenses.
Being prepared for closing costs is certainly of importance. With this insight, you can be!
Are you ready to begin your own home-buying or selling journey with a real estate agent in Montrose, Colorado? If so, please get in touch with us here at Glenn Steil Style Real Estate, as we are all set to guide you through the process!
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