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Learning about all the steps of buying a house may seem daunting. It’s important to do your research but also to have a broker who knows the steps of the process inside and out. This is a rundown of all the steps of closing on a house, including what some of the costs may be and how long they can take.

Closing Costs

Closing costs can be incurred by either the buyer or the seller. They are fees associated with your home purchase and home loan at the closing of the transaction. This is the last step in purchasing a home, when the title of the property is transferred from the seller to the buyer.

How much are closing costs?

When you are interested in purchasing a home, a lender will need to be involved, if you are borrowing any money for the purchase of the home. Home buyers can pay anywhere from 2 to 5 percent of the purchase price of their home. The average closing cost fees that buyers pay is around $3,700.

When you apply for a loan for purchasing a home, the loan estimate will include the closing cost estimate as well. These fees can change, and you may receive a revised loan estimate as the home buying process continues. Before you close, you should receive a Closing Disclosure statement outlining all the final fees. Compare this to your loan estimate to see if everything lines up, and ask your lender questions.

Typically, the fees associated with closing on a home are negotiable. Some fees are tied to certain lenders, as they have certain ways of doing things, like using couriers to deliver paper work. Some lenders are even willing to offer lower closing costs, so it’s important to shop around for the perfect lender.

Fees at Closing

There are many fees that you encounter at closing; application fees, appraisal fees, attorney fees, escrow fees, credit report fees, home inspection fees, HOA transfer fees, property taxes, etc. It makes sense for most of these to be included in the purchase of a home, but if you have questions as to why certain things are required, talk to your lender or broker. Not all inspections or attorney meetings are required by law in every state. So it’s important to find out what you are legally responsible for.

Avoiding Closing costs

There are some lenders who offer loans with no-closing costs. This doesn’t mean that closing costs are waived, they are simply added onto your loan. It can be nice to avoid paying closing costs when you buy a home, but this tends to cost more money, as the costs accrue interest over time. Some home buyers can negotiate with the seller who pays the closing fees. In the contract a seller can agree to be responsible for the buyers closing costs.

While most closing costs are necessary, it is important that you understand what you’ll be responsible for when you complete the purchase of your new home. Do your research and find a lender that offers what you’re looking for.