“How to Navigate Closing Costs Without Surprises”

When buying a home, most buyers focus on the down payment and monthly mortgage. But there’s another expense that can catch people off guard: closing costs. These fees cover the final steps of your transaction and typically range from 2% to 5% of the home’s purchase price. The good news? With the right knowledge and preparation, you can avoid surprises. Here’s how.

1. Know What Closing Costs Include

Closing costs are made up of various fees charged by lenders, title companies, and government agencies. Common items include:

• Loan origination fees

• Appraisal fees

• Title search and title insurance

• Escrow or settlement fees

• Recording fees

• Prepaid property taxes and homeowner’s insurance

By reviewing a detailed estimate upfront, you’ll know exactly what to expect.

2. Review the Loan Estimate Carefully

Within three business days of applying for a mortgage, your lender is required to provide a Loan Estimate. This document breaks down expected closing costs, loan terms, and monthly payments. Go through it carefully and ask questions

about anything unclear.

3. Budget Early in the Process

Don’t wait until the end of your home search to think about closing costs. Build them into your budget from the beginning so you’re not scrambling to come up with extra cash at the last minute.

4. Shop Around for Services

Some costs, like appraisals, are set by lenders. But others—such as title insurance or home inspections—can vary. Shopping around for these services may save you hundreds of dollars.

5. Ask About Seller Concessions

In some markets, buyers can negotiate for sellers to cover part of the closing costs. While not always possible in competitive situations, it’s worth discussing with your realtor when making an offer.

6. Watch Out for Prepaid Costs

Closing costs often include prepaid expenses like property taxes, homeowners insurance, and interest that’s due before your first mortgage payment. These can make your final bill higher than expected, so plan for them in advance.

7. Get a Final Closing Disclosure

At least three business days before closing, you’ll receive a Closing Disclosure. This document shows the final breakdown of your costs. Compare it carefully with your Loan Estimate to make sure nothing unexpected has been added.

✅ Bottom Line:Closing costs are a normal part of every real estate transaction, but they don’t have to be a surprise. By understanding what’s included, reviewing your documents carefully, and budgeting early, you’ll be prepared to close on your home with confidence.