What Are Typical Closing Costs? Your Guide from a Top Realtor in McKinney

So, you’ve found your dream home in the vibrant Dallas-Fort Worth area, perhaps even in a charming place like McKinney, and you’re absolutely thrilled! The offer’s accepted, and you're ready to move forward. But then, 'closing costs' pops up, causing a little confusion. Don't worry, you're not alone! It's a common question I get, especially from first time home buyers. As a top realtor in McKinney, I’m here to demystify this crucial part of your home purchase, ensuring you feel fully prepared and informed.

What exactly are closing costs? Simply put, these are various fees associated with finalizing your home loan and transferring property ownership. They cover essential services by third parties involved—the administrative costs of making your homeownership dream a reality. You should typically budget anywhere from 2% to 5% of your loan amount. For a $400,000 home, that’s $8,000 to $20,000. This range fluctuates based on loan type, location, and required services.

Let's break down some typical costs you'll likely encounter:

• *Lender Fees:** Charged by your mortgage lender for processing your loan. They include:

• Loan Origination Fee: For processing your application.

• Underwriting Fee: Covers evaluating and approving your loan.

• Appraisal Fee: Pays for a professional appraisal to determine home value.

• Credit Report Fee: Cost of pulling your credit history.

• *Title and Escrow Fees:** Ensure you receive a clear title to your new home.

• Title Search: Verifies the seller's legal right to sell.

• Title Insurance (Lender's and Owner's): Protects both the lender and you from future claims.

• Escrow Fees: Paid to the neutral third party (escrow or closing agent) who handles funds and documents.

• *Prepaid Items:** Costs you pay in advance for future expenses.

• Property Taxes: Often, you'll prepay a few months to set up your escrow account.

• Homeowner's Insurance: Typically, your first year's premium is paid upfront.

• *Other Common Fees:**

• Recording Fees: Paid to your local government to officially record the sale.

• Survey Fee: If required, confirms property lines.

• HOA Fees: For communities with a Homeowners Association, you might have pro-rated dues or transfer fees.

• Attorney Fees: While not always mandatory in Texas, some buyers opt for legal counsel.

This list might seem extensive, but transparency is key throughout the entire home buying process. Your lender provides a Loan Estimate within three business days of applying for a mortgage, detailing all estimated closing costs. This allows you to compare offers effectively. Three days before closing, you'll receive a Closing Disclosure, the final, definitive list of all charges.

As an Accredited Buyer Representative, I’ve guided countless clients through this process, from first-time homeowners to those interested in new construction homes. Be prepared and ask questions. Certain fees can be negotiable, or the seller might contribute towards your closing costs, especially in a buyer's market. That's where having an expert like me, your top realtor in McKinney, comes in handy. My

Home Buying Assistance

is designed to make this journey as smooth and predictable as possible.

I’m Brandon Scribner, and my goal is to empower you with comprehensive knowledge and unwavering support throughout your real estate transaction. Understanding closing costs upfront helps you budget effectively and avoid last-minute surprises, ensuring a confident step into homeownership.

Ready to navigate your home buying journey with absolute confidence? Don't let closing costs be a mystery. Reach out to me, Brandon Scribner, for a Free Consultation. Let's discuss your specific situation and ensure you're fully prepared for a successful closing. Your dream home awaits, and I'm here to help you get there efficiently and stress-free!