Whether you’ve owned five homes or you’re getting ready to purchase your first, you may be asking yourself one common question: exactly what are closing costs? As Southwest Florida’s most trusted private homebuilder, we’re happy to help explain!
Basically, closing costs are additional fees you need to pay for the services and expenses that come along with purchasing a new home. Examples of these expenses include underwriting, administration, processing, and application fees.
When you buy a home you are going to pay someone to do the closing and make sure that ownership is cleanly transferred and recorded. You will pay the state and local authorities fees and taxes. If you are purchasing a new home in a community with a homeowners association, there will be some one-time fees paid at closing. You will pay some dues in advance. Basically, whether you’re buying a new home in Southwest Florida or you’re refinancing your current home, there will still be closing costs involved!
On average, homebuyers can expect to pay between about 2% and 5% of the loan amount. For example, if you’re buying a new home that costs around $300k, your closing costs could be anywhere between $6,000 to $15,000.
The term “closing costs” means slightly different things to different audiences. When talking with a Realtor or Salesperson, most people mean the money in excess of the down payment that they would pay to purchase a home. If you speak to a mortgage professional, a title professional or a government regulator they might have a specific idea of closing costs as part of those funds. Either way, closing costs are an integral part of the homebuying process. You’re sure to hear them talked about along the way!
We’re proud to have been selling new homes in Southwest Florida for over 50 years. If you have any further questions about the home buying process or about Neal Communities in general, please contact us today!