When you buy your first home, expect to get nickel and dimed. No, that’s not because you’re working with a bad agent or because you’re inexperienced. Rather it’s because there’s so much more to buying a home than just paying the sticker price.
Everyone knows that buying a home is expensive, but do you know why? What are you actually paying for before you’ve earned the privilege to sign your name on the deed?
Closing costs will put a significant dent in your wallet. So what specifically are closing costs? Well, just about anything you can imagine. Closing costs vary state-by-state, so it’s hard to define them as anything in particular.
So today, we’re giving you an overview of closing costs and how they impact that nagging question, “How much does it cost to buy a house?”

Closing Costs Defined
Let’s talking all the different types of closing costs you might face during your home purchase. These costs vary based on where you live, your loan type, and the type of property you’re buying.
Closing cost commonly include:
- Application Fees: What the lender(read: bank) charges to process your application. Think of this as a rental application. It often covers credit checks and the like.
- Appraisal: Covers an appraiser to asses your property value for tax purposes. Yay (or not) taxes.
- Attorney’s Fees: Covers cost of an attorney to review closing documents. Varies state-by-state. Sometimes the seller can cover this fee.
- Closing Fee: Paid to the title company that oversees the title transfer. Legally required in some states.
- Home Inspection: Sometimes paid for by the buyer, other times by the seller. The home inspection identifies issues with the property. Some issue may delay closing or stop the sale altogether.
- Homeowners? Insurance: Many lenders require the first year’s insurance paid at closing.
- Prepaid Interest: Some lenders require you to prepay interest that accumulates between closing and your first mortgage payment.
- Transfer Taxes: These taxes vary state-by-state, and are assessed when the title transfer from the seller to the new homeowner.
- Underwriting Fee: Think of this fee as a separate application fee. This covers the cost of researching you to decide whether you’re approved for your mortgage.

So How Much Does it Cost to Buy a House?
On average, closing cost fees come to about 2 to 5 percent of the home’s purchase price. The more expensive the home, the higher the closing costs and vice versa. Your lender will give you a closing cost estimate though the fees can change.
However, all closing costs are negotiable. Sometimes you’ll negotiate with the bank while other times you’ll negotiate with the seller. For instance, let’s say a seller really needs to get rid of the home. You can request the seller pays the home inspection.
Always consult with your realtor, like the fine folks at https://www.riverstrandhomesearch.com, before making any decisions.

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