Colorado Home Team LLC
Paul Olthoff, Colorado Home Team LLCPhone: (303) 521-7223
Email: [email protected]

How To Prepare For Closing Costs

by Paul Olthoff 12/07/2021

Once you have found the home that you want to live in, put in the offer, and start the process of closing on a home, you may feel like you’re “home free.” The hard part may technically be over, but there’s one more important thing that you need to think about before you get the keys to your place: Closing costs. 

A few days before you head to sign all of your paperwork to close on the home, your lender will send you a detailed report of different closing costs that you need to pay upon the settlement of the property. 


Closing Costs Defined


Closing costs are what you pay to the lender and third parties. These are due at the time of closing on the property and must be paid up front. You should estimate that your closing costs will be between 2 and 5 percent of the purchase price of the home.


Everything Included In Closing Costs


Closing costs cover both one-time and recurring fees that are a part of your home purchase. The one-time fees are things that are generally associated with buying the home. These would include attorneys fees, lender fees, home inspection fees, document prep fees, underwriting fees, credit report fees, and realtor fees. You’ll also need a bank issued check for your down payment at this time.  


At closing, an escrow account will be set up. This is like a forced savings account that will be drawn from to cover things like taxes, insurance, loan interest, and title insurance. These are all very important costs that are a part of buying a home.     


Do Your Homework Ahead Of Time


The best way to deal with closing costs is to be prepared ahead of time. Talk to your lender in order to get an estimate of the closing costs. From there, you’ll need to decide if you need to finance your closing costs or simply pay them up front. There are advantages to both approaches. Sometimes, lenders will look at you as less favorable if you need to finance all of your closing costs. It all depends on the terms of your loan. This is why research is vital.


Compare Rates And Lenders


It’s important not to go with the first lender you talk to. Get some recommendations from your realtor and friends to see who might be a good fit for you. Every lender specializes in something different, so you want to be sure that who you chose is a good fit for you. 


The most important thing that you can do with closing costs and the financing of your home is to get educated!     


About the Author
Author

Paul Olthoff

About Paul Olthoff, BS, GRI, MCP, SFR, CMRS

We want to turn a real estate transaction everyday into a personal experience where everyone feels like family. We make it our mission to get to know our clients, their needs and provide top-notch service. Started investing in real estate when I was 18 in high school with my dad and have enjoyed it ever since.

We as a team have over 30 years of real estate business experience in the following specialized areas:

* Buyers
* Sellers
* Investors
* Property Management
* Foreclosure Solutions
* Refinancing Low Rates
* Loan Discounts ($3,000 credit)

Also, I am a Colorado native, Veteran and have enjoyed living here most of my life. As a native, I have been Colorado grow and change, observe trends and gain an understanding of Colorado's problems. Have a clear view of Colorado's future and what it can mean to you. 

So when you decide that you would like to buy, sell, invest or refinancing, please call/text Paul at 303-521-7223 today!