I read something interesting today. It seems a survey was conducted that said that over half of all home buyers are surprised by how much the closing costs that are required to obtain their mortgage are. 1000 buyers were surveyed, both first-time and repeat home buyers, and the survey said that 17% of the buyers were surprised at how much the closing costs were. And another 35% were stunned at how much higher closing costs were than they expected them to be. This means that all of home buyers are experiencing closing costs that are higher than they expected them to be.
According to Freddie Mac, the quasi governmental agency, closing costs typically are between 2% and 5% of the purchase price.
Now bear in mind, the cost of I am about to tell you is just for the expense of getting the mortgage. It does not include all of the closing costs, such as prepaid taxes, legal fees, title company fees, title insurance and more. The average cost in New Jersey for 2016 was between m$2000 and $2,249. This is based upon a mortgage for $200,000 with a 20% down payment. If the mortgage amount is higher, your closing costs could be significantly more.
So what can you do to avoid being surprised like this? Speak with your lender, your attorney and your realtor to get a handle on what your closing costs will be. You don’t want to come up short at the closing.