Plano home real estateIf you’re in the market for a Plano, Texas home, you’re probably trying to budget for all of the expenses that come with a home purchase. After all, the asking price isn’t necessarily the entire amount that you’ll pay – there are other expenses that will factor in to the final price. One such expense is your closing costs.

Closing costs are the reals estate related transaction fees you’ll pay when you sign the deal to buy your home. But how much do you need to save up for closing costs? Here’s what you need to know.

The General Guideline for What to ExpectPlano home real estate

Most mortgage advisors will tell you that you should expect to pay about 3 to 5 percent of your mortgage in closing costs. By law, your mortgage provider is obligated to give you a Loan Estimate or LE (this replaces the old Good Faith Estimate) of what your closing costs and total cash for closing will be. Some lenders, prior to October 3rd, 2015, deliberately low-balled the estimate in order to have you sign the mortgage papers, only for you to discover that the actual expenses are much higher.  Today, with the new Truth-in-Lending-Act(TILA) / Real Estate Settlement Procedures Act(RESPA) Integrated Disclosures – that’s a mouthful for saying the new acronym, TRID – Lenders are BOUND to the penny for the estimates provided on the Loan Estimate.  And that’s a good thing – in case you are puzzled.  If the lender low-balls and the actual costs are higher, the lender will pay the difference, not the buyer.

How Your Closing Costs Break Down

You’ll want to get LE’s from several different lenders and compare the costs before signing a mortgage agreement. Your lender will give you a breakdown of costs in your LE. But in general, there are certain closing costs you can expect to pay.

Plano home real estateOne cost that some lenders include is the loan origination fee, a small charge to compensate the lender for the time it takes to prepare the initial loan documents. Sometimes these fees can be called Processing, Underwriting, Closing, Admin, etc. This fee typically runs, in the Plano, TX market between $1100 to $1500. Many times these fees can be offset by an interest rate premium that will lower the borrowers out of pocket costs.There is also appraisal and credit report fees that can range from $450 – $750.

You’ll be expected to pay your attorney fees as well as the lender’s attorney fees. Your lender may require you to get private mortgage insurance, if you put down less than 20%. The title search and title Plano home real estateinsurance to protect your lender from title fraud will depend on you sales price (typically 1%).

There are also several other closing costs to keep in mind, like escrow fees, notary fees, pest inspections.

Closing costs can be quite expensive, which is why you’ll want to make sure you budget appropriately when you buy your new home. Warren Whitaker, your mortgage professional, can help you to figure out how much you need to budget for closing costs. Call Warren today to learn more about budgeting for the home buying process @ 972.523.8353.

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