<article class="post-638898 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-638898"><span class="entry-date">February 13, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">What You Should Know About Closing Costs</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=What+You+Should+Know+About+Closing+Costs&url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fwhat-you-should-know-about-closing-costs%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="What You Should Know About Closing Costs Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/what-you-should-know-about-closing-costs-KCM.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>Before you buy a home, it’s important to <a href="https://www.simplifyingthemarket.com/2023/02/10/how-to-win-as-a-buyer-in-todays-housing-market-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">plan ahead</a>. While most buyers consider how much they need to save for a <a href="https://www.simplifyingthemarket.com/2023/02/03/you-may-not-need-as-much-as-you-think-for-your-down-payment-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">down payment</a>, many are surprised by the closing costs they have to pay. To ensure you aren’t caught off guard when it’s time to close on your home, you need to understand <strong>what closing costs are and how much you should budget for</strong>.<!–more–></p>
<h4><strong>What Are Closing Costs?</strong></h4>
<p>People are sometimes surprised by closing costs because they don’t know what they are. According to <a href="https://www.bankrate.com/mortgages/understanding-the-closing-process/#wh"><em>Bankrate</em></a>:</p>
<blockquote><p><em>“Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”</em></p></blockquote>
<p>In other words, your closing costs are a collection of fees and payments involved with your transaction. According to <a href="https://myhome.freddiemac.com/buying/understanding-costs"><em>Freddie Mac</em></a>, while they can vary by location and situation, closing costs typically include:</p>
<ul>
<li>Government recording costs</li>
<li>Appraisal fees</li>
<li>Credit report fees</li>
<li>Lender origination fees</li>
<li>Title services</li>
<li>Tax service fees</li>
<li>Survey fees</li>
<li>Attorney fees</li>
<li>Underwriting Fees</li>
</ul>
<h4><strong>How Much Will You Need To Budget for Closing Costs?</strong></h4>
<p>Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical, too. According to the <em>Freddie Mac </em>article mentioned above<em>,</em> the costs to close are typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to cover your closing costs.</p>
<p>Let’s say you find a home you want to purchase for the <a href="https://www.nar.realtor/research-and-statistics">median price</a> of $366,900. Based on the 2-5% <em>Freddie Mac</em> estimate, your closing fees could be between roughly $7,500 and $18,500.</p>
<p>Keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.</p>
<h4><strong>What’s the Best Way To Make Sure You’re Prepared at Closing Time?</strong></h4>
<p><em>Freddie Mac</em> provides great advice for homebuyers, <a href="https://myhome.freddiemac.com/buying/understanding-costs">saying</a>:</p>
<blockquote><p>“<em>As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs</em>.”</p></blockquote>
<p>Work with a team of trusted real estate professionals to understand exactly how much you’ll need to <a href="https://www.simplifyingthemarket.com/2023/01/19/pre-approval-in-2023-what-you-need-to-know/?a=712984-fa409495d5d70154d03a25e81e9540e2">budget</a> for closing costs. An agent can help connect you with a lender, and together your expert team can answer any questions you might have.</p>
<h3>Bottom Line</h3>
<p>
It’s important to plan for the fees and payments you’ll be responsible for at closing. Let’s connect so I can help you feel confident throughout the process.</p>
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