Don’t Let Closing Costs Take You By Surprise!


When you start your home search it is like the start of a race and you don’t cross the finish line until you have “closed.” Seems easy right, you show up, sign some papers and they hand you the keys to your new home. You need to keep in mind that in addition to the down payment, moving cost, inspections and other items that come up before the closing you need to have a bit of money set aside for any cost that might come up at closing.

CLOSING FEES
This includes all the “paperwork fees” required to close the loan—like title services, title insurance, credit reports, and processing fees.

APPRAISAL
Your mortgage lender will probably ask you to pay for an appraisal to make sure that the house is worth what you paid for it.

PROPERTY TAXES
You will be required to pay taxes each year on your home. Many lenders roll into your monthly mortgage payment or you can pay separately.

PRIVATE MORTGAGE INSURANCE (PMI)
Required if your initial down payment is less than 20% of the home’s price, you will be required to carry private mortgage insurance (PMI) to protect the lender.

INSURANCE
You will also be required to have a homeowner’s insurance policy to cover your house (and personal belongings).

ESCROW
Escrow accounts also known as “prepaids” will usually include pro-rated amount to cover payments for property taxes, assessments, homeowners insurance and, if applicable, mortgage insurance.

HOA DUES
Buying a townhome, condo or highrise will mean becoming a member of a homeowners association (HOA). HOA’s require you to pay their monthly (or yearly) dues for services they provide. Fees can be as low as $10.00 a month to $1,000 or higher depending on where you live.

REPAIRS
Most homeowners end up making at least a few repairs to their new home (even if it’s brand new). Budget a few hundred dollars to cover any move-in emergencies that pop up.

UTILITY DEPOSITS
Finally, don’t forget that you’ll need to transfer utilities—or start services with a new company, which may require a deposit.

For advice or assistance ask a Gary Greene agent.

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About garygreene

Toni Nelson is the Director of Strategic Initiatives for Better Homes and Gardens Real Estate Gary Greene, Houston's largest and most productive real estate sales force in Houston, Tx. Toni began her real estate career in 1983, has served on the Board of Directors for the National Association of Realtors, Texas Association of Realtors and the Houston Association of Realtors. She specializes in marketing, trains agents, writes blogs and stays involved in the ongoing evolution of the real estate industry.