By Joe Szabo, Scottsdale Real Estate Team
Various fees associated with a home purchase are called “closing costs.” Both buyers and sellers usually pay closing costs. Ask your real estate agent about which you’re responsible for.
Sellers’ costs include:
1) Paying off loan charges
2) Brokerage fee
3) Transfer tax
4) Title insurance and escrow fee
5) All or part of a home protection plan.
Buyers’ costs include:
1) Home loan fees
2) Title insurance
3) Transfer taxes
4) Inspector fees
5) Mortgage insurance
6) Attorneys’ fees
7) Hazard insurance.
To qualify for a home loan, you must show the lender enough cash on hand for the down payment and closing costs. In addition, you usually have to have enough for several months’ mortgage. One way to reduce closing costs is to get a no-point loan; you may have to pay a higher interest rate, but it saves you money up front.
Another way is to purchase a home late in the month – less interest will be owed to the lender.
Lenders won’t allow a seller to credit money towards a buyer’s cash down payment, but will allow them to cover some, or all, of the non-recurring closing costs. One way to convince a seller to cover non-recurring closing costs is to increase the purchase price; the catch, however, is that the lender will have to appraise the property at the higher price or the deal might fall apart.
Lenders’ policies vary: some permit credit for all non-recurring closing costs; others limit it to 3.6% of the purchase price. Some portfolio lenders, however, are more lenient: they’ll pay all non-recurring closing costs in exchange for a higher interest rate. In a slow market, a seller or builder will usually pay at least some of the non-recurring closing costs.
Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of the best Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, info@ScottsdaleRealEstateTeam.com or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes forSale and Estates forSale inScottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.
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