Sometimes first-time buyers are not aware there are additional costs associated with buying a home. Be sure you know what they are so you are prepared when you go to buy. Of course everyone talks about the downpayment for the purchase, which can be as little as $0 (VA loans) to as much as the buyer wants to put down but frequently the downpayment is in the 5 - 20% range. Other costs to consider include: lender fees, title insurance for the lender (seller usually pays for the buyer's title insurance in this market), escrow fee, recording fees, prepaid property taxes, transfer taxes, appraisal fee, property inspection costs, prepaid homeowners insurance and the initial home owner's association monthly fee if there is one. Of course these can be negotiable but usually the buyer is paying for most of these items.
So what does that dollar amount look like? As a bundle, closing costs often are in the 2% to 5% range of the purchase price, according to Freddie Mac. These are in addition to your down payment. You agent will help you figure these out but it is important to consider them as you look at purchasing a home.
