What Are Closing Costs?
This is a question that frequently echoes in the minds of home buyers and sellers. Our guest writer, Nick Overcash, is bringing confusion to clarity in this post, leaving you with the knowledge you need to navigate the home buying or selling process with confidence.
The basic mortgage closing costs in North Carolina can vary depending on the specific details of the transaction and the lender involved. However, here are some common closing costs you may encounter when purchasing a home in North Carolina:
-Loan Origination Fee: This fee is charged by the lender for processing and originating the loan. It is typically a percentage of the loan amount.
-Appraisal Fee: An appraisal is required by the lender to assess the value of the property. The cost of the appraisal varies based on the size and complexity of the property.
-Credit Report Fee: Lenders usually charge a fee to obtain your credit report to assess your creditworthiness.
-Title Search and Title Insurance: These costs cover the search of public records to verify the property's ownership and any liens or claims against it. Title insurance protects the lender and/or buyer against any potential title defects. The costs for these services can vary.
-Recording Fees: These fees are charged by the county to record the deed and other legal documents related to the property purchase.
-Attorney Fees: In North Carolina, an attorney is usually involved in the closing process. The attorney's fees can vary depending on the complexity of the transaction and the attorney's rates.
-Prepaid Expenses: These include property taxes, homeowner's insurance premiums, and prepaid interest. Lenders may require you to prepay a portion of these costs at closing.
Other optional expenses include surveys, home inspections, and paying points to buy down the mortgage rate.
A good rule of thumb is to set aside $4,000 for traditional closing costs and an additional 1% of loan amount for prepaid expenses. It is important to note that these are general closing costs, and the actual costs can vary based on the lender, the loan program, and the specific circumstances of the transaction.
There are many different programs and buyer strategies in the market today that can take advantage of lender or seller paid closing costs.
Collaboration between real estate agent, buyer and lender is key to ensure the best overall product and costs for each individual home purchase.
Written by Nick Overcash (Mortgage Broker in Raleigh, NC)
