Let’s Talk About Closing Costs
What are closing costs?
Closing costs include a variety of expenses for services, taxes and special charges dealing with the purchase of a home. They include title research, loan points, lender fees, attorney fees, document fees, insurance, prepaid interest, and property taxes. Closing costs are paid at the time of closing. Closing costs vary per transaction but on average you can expect to pay up to 3% of the sales price.
Note: Closing costs should not be confused with a down-payment, which is a portion of the purchase price which is applied towards the purchase.
Who pays the closing costs?
Closing costs are either paid by the home seller or home buyer. It depends on what the buyer or seller negotiate during the initial contract phase.
Why do I need owners title insurance?
A clean or clear title is important because the title is what gives you ownership of a property. Owners title insurance protects the homeowner if someone sues and says they have a claim against the home from before the homeowner purchased it.
When you purchase your home, you receive a document most often called a deed, which shows the seller transferred their legal ownership, or title to you. Title insurance can protect you if someone later sues and says they have a claim against the home from before you purchased it. Common claims come from a previous owners failure to pay taxes or from contractors who say they were not paid for work done on the home before you purchased it.
Most lenders require you to purchase a lenders title insurance policy, which protects the amount they lend. You may want to buy an owners title insurance policy, which can help protect your financial investment in the home.