For first-time homebuyers, purchasing your first home in the Charleston, SC area can feel intimidating and overwhelming. There are questions such as, what can I afford? What is a good interest rate? Is my credit good enough? How much should I put down? As a homebuyer, it’s important to plan and budget for the expenses you’ll encounter when you purchase a home; however, many forget about one financial factor: the closing costs. While most people understand the need to save for a down payment, many forget to include their closing costs into their budget. Here’s some information to help you get started so you’re not caught off guard when it’s time to close on your home.

 

What Are Closing Costs?

Whether you're a first-time homebuyer or you're refinancing your home, closing costs are an anticipated expense that you will need to prepare for during the homebuying process. Closing costs include a variety of expenses such as lender fees, title insurance, processing fees, tax services fees, credit report fees, appraisal fees, survey fees, attorney fees, and homeowners insurance. In other words, your closing costs are a collection of fees and payments made to a variety of individuals and organizations who are involved with you finalizing the purchase of your home. Some of these costs are unavoidable while others, such as your lender's fee, can be negotiated.

 

Who Pays Closing Costs?

Both parties (the buyers and sellers) have certain costs they must pay during a home purchase. The buyer typically pays for any fees relating to their mortgage loan, and the seller pays the listing and buyer agent's commission and various fees relating to the transfer of property. With that being said, closing costs are negotiable so the buyer can ask the seller to pay for the buyer's closing costs, however, this is not something we would recommend. From the seller's perspective, if they receive two offers for the same amount but only one buyer is asking them to pay the closing costs, which offer do you think they will accept? It is always best to budget and plan for the fees associated with the buyer to pay.

 

How Much Will You Need To Budget for Closing Costs?

The costs to close are typically between 2% and 5% of the total purchase price of your home. So if you find a home you want to purchase for $400,000, for example, closing costs will be between $8,000 and $20,000. Upon ratification of a sales contract, your lender is required to send you an initial estimated closing costs disclosure. And then, not less than three days before your scheduled closing, you will be provided a closing disclosure. This document provides the final figures of your loan including all closing costs and mortgage fees. 

 

Call Team Lail-Chambers to Close on Your First Home in Charleston, SC!

In today’s real estate market, it’s more important than ever to make sure your budget includes any fees and payments due at closing. If you are feeling overwhelmed by all that this entails, the best way to understand what you will need at the closing table is to work with Team Lail-Chambers. Our team of experts, led by Bob Chambers and Pheobe Lail-Chambers, has the Lowcountry knowledge to fit you with the home of your dreams — whether in Mount Pleasant or anywhere else in Charleston! We work with you to find a home that fits your budget, taste and lifestyle. We can’t wait to help you. Don’t delay, give us a call today!