There are obvious costs included in buying a home -- from the price of the home and required down payment to the interest rate of the mortgage and additional expenses that are sometimes overlooked by first-time, and even experienced homebuyers.

One of these includes the closing costs associated with buying a home. Closing costs, a catchall category, covers various fees associated with closing a home such as running a credit report, processing fees, legal fees, inspections, appraisals, title searches and recording fees. Together, depending on the cost of the home, this can be a relatively significant amount.

Reducing Your Overall Closing Costs

While many closing costs are typically the buyer’s responsibility, there are ways to offset or split your closing costs.

In some cases, the seller will contribute to a portion of the closing costs.  To take advantage of this potential benefit, discuss with your real estate agent the possibility of splitting the closing costs so that it can be incorporated into any purchase offer you prepare. Then your agent will be able to determine the seller’s willingness to cover a portion of these charges in finalizing a contract with the seller’s agent.

Be careful of “no closing costs” mortgages offered by some lenders. While these seem may great, on the surface, be sure to review the fine print carefully. You may find that these fees are actually rolled into the structure of your loan and result in you paying much more than you otherwise might after factoring in the added costs. Your qualified agent, who likely understands loans and the mortgage industry better than most, can be a valuable resource in reviewing and helping you to make the best choices.

Save and Plan Ahead

The days of the zero-down mortgages are largely over, possibly with exception of qualified United States veterans whose benefits may include the option of a 100% financed government-backed mortgage on a home purchase. So to purchase a home, you will need to amass the funding for a down payment and associated closing fees.  At a minimum most buyers will need 5-10% for a down payment and a cushion to cover the closing costs noted here.  Additionally, keep in mind that you may also need monies for your move and possibly to purchase some new furnishings for your home.

To discuss these concerns more specifically, please contact me today for a consultation. I will be happy to answer any questions you may have, and/or help you structure a personalized plan to start the home buying process.

Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX Villager
Serving Chicago's North Shore, North and Northwest Suburbs
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.