If you are looking into buying a house you may want to know all the costs that are associated with this process. There is nothing as boring as being caught off guard, by a certain bill that you had not budgeted for. That is why it is a good idea to know how much are your closing costs when buying a house.
Closing costs may vary between 2% to 5% of the home value, this will mean that a $200,000 house will have closing costs that may range from $4,000 to $10,000.
It may be difficult to determine ahead of time how much you are going to pay in closing costs which are also known as settlement costs, this is because it is not only one item that you are going to pay for but a number of different expenses that you have to pay for. These expenses depend on the different states and counties in the united states.
The lender you are getting the mortgage from may also add some few expenses and your real estate agent may be another cause.
How do you calculate closing costs on a house?
When you calculate closing costs they can be divided into two this is costs that are associated with buying a house and taking out a loan and costs that are associated in owning the home.
The costs associated with buying a house and taking out a loan are the fees that the lender or the third party charge you cover the costs of processing your paperwork ,examining your unique case and eventually creating your loan.
The later are costs such as property tax, homeowner’s insurance and, if applicable, homeowner’s association dues. These costs can often be added into the total mortgage loan amount and paid through monthly installments.