February 13, 2023

What You Should Know About Closing Costs | MyKCM

Before you buy a home, it’s important to plan ahead. While most buyers consider how much they need to save for a down payment, many are surprised by the closing costs they have to pay. To ensure you aren’t caught off guard when it’s time to close on your home, you need to understand what closing costs are and how much you should budget for.

What Are Closing Costs?

People are sometimes surprised by closing costs because they don’t know what they are. According to Bankrate:

“Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”

In other words, your closing costs are a collection of fees and payments involved with your transaction. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting Fees

How Much Will You Need To Budget for Closing Costs?

Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical, too. According to the Freddie Mac article mentioned above, the costs to close are typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to cover your closing costs.

Let’s say you find a home you want to purchase for the median price of $366,900. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,500 and $18,500.

Keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.

What’s the Best Way To Make Sure You’re Prepared at Closing Time?

Freddie Mac provides great advice for homebuyers, saying:

As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”

Work with a team of trusted real estate professionals to understand exactly how much you’ll need to budget for closing costs. An agent can help connect you with a lender, and together your expert team can answer any questions you might have.

Bottom Line

It’s important to plan for the fees and payments you’ll be responsible for at closing. Attend my next online homebuyer workshop so you can help you feel confident throughout the process.

About the Broker/Owner 

Marcus Bruno

I am a licensed real estate broker with over 20 years of experience in the industry. I started my career in 2000 as a real estate agent, and in 2010 I became a broker. I have a passion for helping people find their dream homes and negotiate the best deals. I specialize in residential real estate, and I have extensive knowledge of the local market and trends. In 2015, I moved to Houston with my family and in 2018 opened Bruno Fine Properties Inc, a real estate brokerage that serves the Spring area and surrounding communities.  I am a proud father of five beautiful girls, and I have been happily married to my wife Malika Bruno since 2003. When I am not working, I enjoy spending time with my family, playing golf, and reading. I am always eager to meet new clients and look forward to sharing my knowledge.

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