For many, buying a new home is a thrilling and significant milestone. However, the responsibility of closing costs comes with the excitement of owning a new place. Often underestimated, these costs are essential to understand before purchasing a home. At Town & Country Credit Union, our mortgage lenders help you secure your dream home and guide you through the intricacies of closing costs.

What are Closing Costs?

Closing costs refer to the fees and expenses of finalizing a real estate transaction. These costs are beyond the actual price of the property and cover a range of essential services and processes that enable the completion of the home purchase.

Breakdown of Closing Costs:

  • Loan Origination Fees: These fees cover the administrative costs associated with creating and processing a loan.
  • Appraisal Fees: A professional appraisal is necessary to determine the property's fair market value. 
  • Title Insurance: Protects buyers and lenders from potential property title issues. It assures a clear title and ownership.
  • Title Services: The third-party escrow company manages the closing process, holds funds, and ensures all conditions are met before the transaction is finalized.
  • Home Inspection Fees: An essential step to ensure the property is in good condition and to identify any potential issues that need addressing.
  • Property Taxes and Insurance: The lender often requires prepaid property taxes and homeowner's insurance payments.
  • Credit Report Fees: The cost of pulling the buyer's credit report.
  • Recording Fees: Charged by the local government for recording the purchase documents, varying by location.
  • Underwriting Fees: These fees cover the cost of the lender's underwriting process.
  • Homeowners Insurance: Typically, it is a prepaid premium for the first year, although the cost varies based on the property and location.

Estimating Closing Costs:

While closing costs vary based on location, property value, and the involved parties, a general estimate is around 2% to 5% of the home's purchase price. To get a clearer idea, it's advisable to request a Loan Estimate from your lender. This document will itemize the estimated costs associated with the loan.

Understanding and planning for closing costs is a crucial part of the home-buying process. Reach out to one of our mortgage lenders for a free consultation, or apply online. Being aware of these expenses ensures a smoother and more informed purchasing experience. Choosing Town & Country Credit Union for your mortgage needs gives you access to a team committed to transparency and clarity in every step of your home-buying process. We aim to ensure you are fully informed and prepared for the financial aspects of purchasing your dream home.