You are ready to purchase a Pittsburgh home. What is next? It is time to find the right mortgage with the best terms and closing costs for your home purchase.
But what exactly are closing costs?
Here is a list of the most common costs related to closing on your new home:
· Title Fees – These include the title search and title insurance and the associated attorney fees.
· Recording Fees – The government charges a fee to record the change of ownership of the real estate.
· Mortgage Application Fees – This is usually an upfront fee if your lender would require it.
· Appraisal Fee – The lender requires appraisals to ensure that the property’s value is equal to that of the loan and that there are no underlying problems that detract from the property value.
· Discount Points – Some lenders charge a percentage on the principal loan amount to reduce the loan’s final interest rate as part of your closing costs.
· Underwriting Fees – The buyer pays underwriting fees to the lender to pay for the costs of determining if the buyer qualifies for the mortgage loan.
· Property Tax – Taxes are paid to the local municipality, county, and/or school district based on the property’s predetermined market value established by the county. The lender may need to set an escrow account that collects 1/12 of the annual payment monthly to pay the taxes when due. The buyer may also be responsible for reimbursing any taxes the seller paid in advance as part of their closing costs.
· Homeowner’s Insurance – The buyer is responsible for purchasing a one-year homeowner’s policy at the home purchase time. The lender may establish an escrow account to collect 1/12 of the annual premium to ensure the home owner’s insurance is paid when it comes due again for the following years.
· Transfer Tax – The state and local taxing bodies charge transfer taxes when any real estate is transferred by deed and is typically split equally between the buyer and the seller. You may or may not have this charge as part of your closing costs, depending on the state regulations where you are purchasing your home.
· Homeowner’s Association Fees – If the home being purchased is in a Homeowner’s Association, the buyer may be responsible for paying a monthly assessment along with a one-time capitalization fee that goes into the homeowner’s association reserve fund to pay for future repairs covered by the HOA. If the seller has prepaid monthly assessments, the buyer may have to reimburse the seller on a pro-rated basis.
Above are some of the standard fees included in a buyer’s closing costs. Not all lenders charge the same. Not only do you want to look for the lowest rate, but you also want to be aware of what closing costs are being charged for the loan. A lender can calculate what you can expect to pay in closing costs once you have identified a home you would like to purchase.
The Judi SAYHAY Team is always ready to help you with your real estate needs. Our buyer’s agents can help you maneuver the buying process in this busy real estate market.
Contact us at 412-303-3600 or SAYHAYTeam@gmail.com.