There are plenty of people looking to buy a home or condo in Myrtle Beach that think you need at least 20% down to buy a home or condo. But this myth can be dispelled by the fact that there are many loan programs that allow you to put down as little as 3%.
If you’ve already saved up a down payment and want to start your search for a new home, you also need to make sure you save enough for closing costs.
Freddie Mac defines closing costs as:
“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage. These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”
Many first-time home buyers wish they knew closing costs would be so high. With a low down payment, your closing costs could equal the total amount you saved already for your down payment.
Here’s a list of some of the fees and costs that may be included in the closing costs.
- Government recording costs
- Appraisal fees
- Credit report fees
- Lender origination fees
- Title services (insurance, search fees)
- Tax service fees
- Survey fees
- Attorney fees
- Underwriting fees
Can you avoid these costs?
You can work with your lender to see if these costs can be decreased or deferred. You can get a no-closing mortgage, but they end up costing more in the end with higher interest rates and including the closing costs with the total cost of the mortgage. You can also negotiate with the seller who will pay those fees.
So speak with your lender and agent early and often to determine how much you’ll need to pay at closing. Feel free to contact us and we’ll be happy to help.