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Costs to Consider
from Mortgage Guide 2022
by BallHomes
Expense 1: Down Payment Down payment is the percentage of the purchase price buyers are required to pay at closing. Minimum down payment amounts can vary from 0% to 5% based on the loan program. Expense 2: Earnest Money Deposit
Earnest money is a deposit paid at the time you make an offer on a home. It is part of the sales contract and made payable to your real estate agent’s company. This deposit represents a buyer’s good faith intentions to follow through with the purchase of the property by the specified closing date. Earnest money deposits are typically 1%-2% of the sales price. The buyer will receive a credit for their earnest money deposit at closing. This amount is credited toward down payment. There are certain circumstances when the seller may keep the earnest money deposit if the buyer defaults on the contract. Please check with your real estate agent for specifics. Expense 3: Closing Costs
Closing costs are expenses that both the buyer and seller incur that must be paid at closing. Closing costs are NOT included in the minimum down payment requirements. A typical estimate of closing costs expected to pay at closing is roughly 2% of your sales price. However, your loan officer will provide an estimate that is specific to your loan program and situation. Common closing costs are:
Appraisal Fee Credit Report Fees Title Search/Attorney Fees Lender’s Title Insurance Underwriting/Processing Fees Discount Points/Origination Fee
Expense 4: Prepaids
Prepaids are future fees that must be paid at closing. They are not included in your closing costs because these amounts are set by your homeowners insurance agent, the county tax assessor, and HOA (if applicable). Various prepaids include:
First year homeowners insurance premium Pre-paid interest (based on closing date) Prorated property taxes. This may be a charge or credit depending on the time of year. Property taxes required for the escrow account Homeowners insurance required for the escrow account HOA Dues, if applicable