While Habitat Hunters does not charge a fee to the Austin home buyer, there are still a number of costs associated with the buying process. These closing costs will vary tremendously, based on the price of the house, the size of the mortgage, tax and insurance requirements, and a number of other factors. Here are some of the common closing costs you can expect when buying a home, condo, or other property:
- Loan origination fee – when purchasing any property, the buyer pays a fee to the mortgage company for originating the loan. Historically the origination fee is approximately 1% of the mortgage amount. Lower origination fees may result in higher interest rates.
- Assumption fee – if, instead of originating a new loan, you are taking over the seller’s already-existing mortgage (i.e., assuming responsibility for the loan), you can usually expect to pay 1% of the mortgage amount, which again, will vary depending on your interest rate and processing fees.
- Lender application & processing fees – $0 to $1000. The application and processing fees paid to the mortgage company or broker may be rolled into the origination or assumption fees, usually resulting in a higher rate.
- Credit reports – $25 to $85 per credit report. Anyone loaning you money will want to know your credit score and credit history. The cost of a credit report may be included in the lender processing fees, but sometimes additional reports will be required/requested by the seller, listing agent, mortgage broker, or other parties involved. Mortgage lenders will often pull an additional credit report right before closing, just to make sure nothing has changed.
- Escrow – an amount held by the lender in order to pay taxes and homeowners insurance when due, escrow will be 15% to 20% of your annual insurance cost + 33% to 50% of your annual taxes. The mortgage lender will also take an escrow fee of $40 to $90, which may be included in the application and processing fees. Some buyers choose to waive escrow and are then responsible for paying their own property taxes and homeowners insurance when they become due. This is not recommended (and often may not be possible) for first-time buyers.
- Inspections – based on purchase price, square footage, and any additional recommended inspections (termite, mold, wiring, etc.) home inspections cost $250 to $450 or more. It is highly recommended that you take advantage of your right to have the house inspected.
- Appraisal – $250 to $450 to have an unbiased professional estimate the value of the property you’re looking to buy. Appraisals are not required, but can be a good idea at times.
- Title policy – also known as title insurance, protects the lender and/or property owner from unknown or undisclosed defects in the title, in the unlikely event someone claims they still own the property. The seller will often pay the buyer’s title policy, but the mortgage lender will require you to purchase additional protection for them at a cost of approximately $150 to $800 or more. Recording fees – $25 to $75 to record title and other documents into public records.
- Move-in fees – if you’re moving into a house, the homeowners association dues will usually be prorated, and will be no more than $200. If you’re moving into a condo, initiation and monthly fees will almost always be required, and will vary from $100 to $500. Move-in fees for duplexes and townhomes will be within this same price range.
- Legal fees – Your lender’s attorney will charge legal fees of approximately $250 to $600 for documents prepared on the lender’s behalf as part of your loan package.
Many times it is possible to negotiate with the seller such that they will pay some or all of these closing costs. Let our expertise and tireless effort work for you!