You’re buying a new home for a certain purchase price, but that’s not what you’ll actually pay for your home.
You’ll need to add closing costs on top of your purchase price; these are fees, taxes, and other costs that you will pay on settlement day. Closing costs include lender fess (origination fees, underwriting fees, etc.), services (appraiser, inspections, title search, etc.), insurances, and taxes. Buyers can typically expect to pay 2 to 5 percent of their purchase price in closing costs.
But don’t worry about being surprised on closing day. Your lender is required by law to provide you with a good-faith estimate of your loan and closing costs three days before settlement. Look over this document carefully and don’t hesitate to ask any questions.
Wondering what else could be included in your closing costs? Check out this list from Zillow: https://www.zillow.com/mortgage-learning/closing-costs/.