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Closing Costs: What to Expect When Buying Your First Home

key-tags-163183_640Purchasing that first home can often be an exhausting venture, reaching deep into one's psychological, emotional, and financial matters. A down payment on the home can often be one of the biggest steps, yet new homeowners should know that it is by no means the final maneuver in securing a residence. Closing costs can often be a sneaky fare for many unsuspecting home buyers; however, knowing what to expect can provide a fountain of relief and aid in reducing anxiety and stress during the entire process.

Fees that are charged by lenders relating to the mortgage of the home are called closing costs. Although the home buyer is usually the one who pays these costs, some of the fees may befall the seller. Here are a few things to expect when facing closing costs:

Closing costs generally run between 3% to 5% of loan cost.

A loan amount will provide an estimated guide as to the amount of closing costs. Generally speaking, final costs will run between three- to five-percent of the mortgage or loan. For example, a $200,000 loan will having closing fees of $6,000 to $10,000, at times exclusive of the other fees that are expected to be paid at closing.

Sellers May Also Pay.

In Maine, it is possible that sellers must also pay for some of the final fees associated with buying real estate. Sellers may have to pay transfer taxes, commissions to other agents, notary fees, attorney fees, and even prepayment penalty fees. A seller may also be financially responsible for mortgage interests and property taxes, making it essential that a home is purchased from a financially-prepared seller.

Escrow May Be Established.

Setting up an escrow or impound account often depends on the terms of the loan (or mortgages). This will help buyers in paying homeowners insurance and property taxes, two fees that are often included when both buying and selling a home.

Many of the fees of final costs are related to running a credit report, paying attorneys, appraisals, title insurance, and pest inspections. Costs vary on location, type of house, and loan options, so it is always wise to consult with a Coldwell Banker or other expert to be fully informed of the many different fees. However lengthy the process is of buying a home in Maine, the exceptional payoff is sure to last for years to come.

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