20 Closing Costs to Know Before Buying a House

Closing costs can be a painful surprise to new home buyers.

What are closing costs?

They’re a range of expenses and services when buying a home. The majority of closing costs will fall on the buyer, but the seller will be responsible for some as well.

In most cases, buyers can expect to pay between 2% and 5% of the purchase price on closing fees. So, if the home costs $200,000, expect to pay between $4,000 and $10,000 in closing costs.

Understanding how closing costs work and what they cover will help you budget accordingly to ensure a smooth transaction in the final stages of buying a home.

1. Appraisal Fee

Lenders need to know how much a property is worth before they can approve a loan. There are two main reasons for this.

  • To make sure the amount you want to borrow is justified.
  • The lender needs to be able to recoup the value of the home if the buyer defaults on the loan.

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