When it comes time to close on your next property, there are five closing costs you need to be prepared for:
1. Escrow fees. Being in escrow means you’re in an arrangement where a neutral third party helps exchange documents and money so that own the home free and clear once the transaction is complete. This is typically one of the larger closing costs you’ll have to cover.
2. Title fees. If you’re getting a loan or transferring properties, the seller pays the majority of these, and you only have to pay a small amount to ensure that the title is exchanged without issue.
3. Lender fees. Various lender fees are built into all mortgage loans—some of which are included in the financing, while others are paid up front. In any case, make sure you go over these fees with your lender.
4. Prepaid fees. These can include taxes, insurance costs, and interest payments.
5. The supplemental tax bill. This might not come up at the closing table, but you may get a bill in the mail three months later stating that you owe supplemental tax. What does this mean? Basically, if you buy a home at a certain price but it sold previously for a lesser amount, you have to pay whatever the difference is in terms of property tax.
If you need help buying your next home or you have any other real estate needs I can help you with, don’t hesitate to give me a call or send me an email. I’d love to speak with you.