In this video Robert discusses what closing costs are when buying a home.

When buying real estate, your closing costs are primarily associated with the fees of getting a mortgage loan. These fees include a mortgage origination fee, processing and underwriting fees, the cost of the appraisal, and the cost of title insurance for your lender.

Another thing that can be considered with the closing costs are pro-rations. Lenders require that property taxes and homeowners insurance are collected and payed by them. They require that the escrow account has some money in it at closing. This amount will vary depending on the time of the year, and whether or not the seller has already paid property taxes for that year.

You will also have a small closing fee from the Title Company you close with. In Cache Valley, this closing fee is usually around $100. If you buy a home with cash, the actual Title company closing fee may be the only fee you actually have to pay.

One thing many buyers do to reduce the closing fees they will actually have to pay is to ask the sellers to pay for their closing costs. Essentially, this just wraps the closing costs into the mortgage loan so they can be paid over an extended period of time. This is beneficial for buyers who don’t have a lot of extra cash on hand when they purchase a home.

A rule of thumb is to expect closing costs of about 3%. Of course, these costs will vary based on the lender you’re using, the amount of your down payment, and the time of year you buy.

One thing to note in the different closing costs is that there is no fee for using a real estate agent. That’s right, when buying real estate, most agents don’t charge you anything. Their commissions are paid by the sellers.

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