Many buyers ask questions about their expenses when buying a home. I wanted to answer that question for you, so you would know what to expect.
Buyers have a few main expenses when purchasing a home. One of the largest single expenses has to do with the loan you get – it’s called an origination fee. Most lenders charge a 1% origination fee on any loan. If your loan is $100,000, the fee you pay at closing is $1000. That is the fee your lender collects for originating, or granting, your loan. Then there are usually other loan fees called “underwriting fees” and/or “processing fees.” (By the way, that is why I recommend Eric Schroeder as a lender – his company charges lower fees than other companies! His number is 817-602-6695.)
You will also have to pay one year of insurance up front. That can range from $800 to $2000 or so. You get to choose your company, so I always suggest you check with several before deciding on one.
Your lender will also start a tax escrow for you with two or three months of taxes collected upfront. That is how they start an account to hold your taxes in so they can pay them when they come due. Lenders prefer to pay the taxes on your house because your home can be foreclosed upon if your property taxes are not paid. By holding that money, they know your property taxes will be paid.
Your lender can give you a breakdown of what your expenses will look like. In fact, they are required to do so once you formally apply for a loan.
By the way, you don’t have to worry about paying me – the seller always pays the commission.
Do you have a question I didn’t answer? Email me and let me know what it is. I’ll get the answer to you shortly!