Closing costs can come as a surprise expense for some homebuyers but understanding them early on can help you better prepare for the final steps of purchasing your new home. Keep reading to discover what closing costs are and why they’re important!
When Can I Expect My Closing Cost Estimates?
As part of the homebuying process, you’ll receive a Loan Estimate within three business days of applying for a mortgage. This document provides a detailed breakdown of the estimated closing costs, giving you an early idea of what you’ll need to budget for. As you get closer to your closing date, you’ll receive a Closing Disclosure, which finalizes these costs and provides the exact amounts of what you’ll owe.
What Are the Common Fees Included in Closing Costs?
Closing costs typically range for 2% to 5% of the home’s purchase price and can include a variety of fees, such as:
- Loan Origination Fee: Charged by the lender for processing the Loan Application.
- Appraisal Fee: Covers the cost of having the home’s value assessed.
- Title Insurance: Protects against potential disputes over property ownership.
- Home Inspection Fee: Pays for a professional inspection of the home.
- Property Taxes: May include a portion of the upcoming property tax bill.
- Homeowners Insurance: Often required upfront for the first year of coverage.
- Prepaid Interest: Covers interest from the closing date until the first mortgage payment.
If you have any questions about the fees listed on your Loan Estimate or Closing Disclosure, your Loan Team will be there to help you answer them!
When Do I Pay the Closing Costs?
Closing costs are typically paid on your home’s closing day when you may review and sign various documents and provide the funds to cover the closing costs. Your Closing Agent will let you know exactly when and how to pay these fees as you get closer to your closing date.
By understanding these closing costs and why they’re important, you can walk into your closing date feeling confident and prepared. If you ever have questions about your closing costs fees, please reach out to your Pulte Mortgage Loan Team. They will be happy to assist you!
