Be Prepared for These Sometimes Unexpected Costs at Closing

Check out these sometimes-unexpected closing costs when purchasing a new home.

Understanding the extra costs that come after closing can help you avoid surprises. Learn how to be well-informed throughout your home-buying journey!

  1. Appraisal

    Your lender will require an appraisal before you can purchase the home. Lenders use appraisals to check if the home's price is accurate by considering recent updates and the current market. Although the lender orders the appraisal, the buyer typically pays this fee. Fees can vary by market and company.

  2. Home Inspection

    It’s always a good idea to hire an inspector to look at the home you’re considering, and many realtors include this as part of your offer on the home. Home inspectors can find issues that might not be apparent to a buyer, such as problems with electrical systems. Additionally, a home inspection can provide you with some room for negotiation. Home contracts usually include a clause related to the inspection results, allowing you to either cancel the purchase or request the seller to fix any issues found. You may consider additional inspections, such as foundation or radon testing, if you live in certain areas.

  3. Pest Inspections

    A pest inspection by a professional is a must, especially if you’re purchasing a lived-in home. As the name suggests, they will look for signs of termites or other pests in the home and will spot things in greater detail. This isn’t usually required, but it is in your best interest.

  4. Closing Costs

    There are a number of expenses that can go towards the closing costs, and they all vary by the sale price and contract. They can include real estate commissions and title work for the sale. To best prepare yourself, closely review the loan estimate and closing disclosure with your lender in advance. By doing this, you can avoid any surprise expenses in the final week of the sale.

  5. Escrow Funding

    Your escrow consists of your homeowner’s insurance, property tax, private mortgage insurance (or PMI), flood insurance, and homeowners’ association dues (if applicable). You can expect to pay a first-year premium for your home insurance and set up reserves for your homeowner’s insurance and property taxes. It’s also important to start reserves for any other items that are escrowed.

The best thing you can do to alleviate these unexpected costs is communicate with your lender. We’re here to answer any questions you may have, and offer our best advice!

The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.