Closing Costs When Buying A Home
By Raynor James, Fri Dec 9th

Closing costs are often the last thing a person thinks of whenbuying a home. While closing is the joyous moment the homebecomes yours, the costs can be surprisingly aggravating.

When you purchase a home, condo or other property, you will gothrough a period known as escrow. During escrow, various issuesrelated to the property transfer are worked out. The last day ofescrow is known as the closing day and you are going to bepaying closing costs.

Closing costs come in many forms. Some involve significantdollars while others are relatively painless. Here's a list oftypical costs:

Escrow



Fees

An escrow agent is essentially a third party that works with theseller and buyer to finalize the transaction. For thisassistance, the escrow agent will charge a fee. Depending onyour area and the agent, you can expect fees from a few hundreddollars to around a thousand or so. Make sure you find out thefees before picking an escrow agent.

Home Loan

Obtaining a home loan in the current market is a highlysubjective event. "Points" can be a major cost associated withhome loans. Points are essentially a fee you pay or have buildinto the loan for the privilege of being allowed to borrowmoney. A point usually equates to 1% of the loan. On a loan of$300,000, one point would equal $3,000. If you have excellentcredit, you can shop for a loan that doesn't require you to paypoints.

Home and Title Insurance

Insurance for your home and title are a must. If you areborrowing money to purchase the home, each is mandatory. If youare using your own funds, you should still get both forms ofinsurance. As each name implies, they provide insurance againstissues involving your home and problems with the titletransferred to you. You want to have clear title.

PMI

Private Mortgage Insurance, "PMI", is mandatory if your downpayment is less than 20% of the purchase price. You can expectto pay a few hundred dollars a year in PMI.

Inspections, Appraisals and Miscellaneous Fees

In the home purchase process, you are going to use a variety ofservices to validate the property is your dream home. Theseservices come with fees and you can expect to pay for homeinspectors, appraisers and the like. Depending upon the stateyou live in, many of these fees may be built into your mortgage.Nonetheless, you need to know exactly what you must pay for onclosing day so you can budget accordingly.

Closing escrow should be one of the happier days in your life,particularly if it is for your first home. Make sure you knowthe costs associated with it so you don't have to spend the dayrunning around borrowing money.

About the author:Raynor James is with http://www.fsboamerica.org - providing FSBOhomes For Sale By Owner. Visit our "sell my home" page athttp://www.fsboamerica.org/seller.cfm to list and sell your homefor free for one month. Visithttp://www.fsboamerica.org/buyer.cfm to see homes for sale byowner.

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