Understanding Closing Costs When Buying a Home
Understanding Closing Costs and How a Broker Can Help!
Buying a home is super exciting! But before you get the keys to your dream home, there are some final costs you need to pay—these are called closing costs. Let’s break it down so you know exactly what to expect and how working with a broker like me can actually save you money!
What Are Closing Costs?
Closing costs are the fees and expenses you pay when you finalize your home purchase. They cover a variety of services that make sure your home loan is processed correctly and legally. These costs typically range from 2% to 5% of the home’s purchase price.
What Does the Lender Control?
Some closing costs are set by the lender (that’s me if we work together!). These include:
- Origination Fees: This is what the lender charges to process your loan.
- Discount Points: You can pay extra upfront to lower your interest rate.
- Underwriting Fees: This covers the cost of reviewing and approving your loan.
Since I’m a mortgage broker, I work with multiple lenders to find you the best rates and lowest fees, meaning you could pay less in these areas!
What the Lender Does NOT Control
Some costs are set by other companies and services, including:
- Appraisal Fee: A professional checks the value of the home.
- Title Insurance: Protects you and the lender in case of legal issues with the home’s ownership.
- Escrow Fees: Pays the company that handles the closing paperwork.
- Home Inspection: Optional, but highly recommended to check the home’s condition.
How a Mortgage Broker (Like Me!) Can Help You Save
As a mortgage broker, I don’t work for just one bank—I work for YOU. I shop around to different lenders to find the best rates and lowest fees possible. Here’s why that’s a big win for you:
✅ Lower Lender Fees: Since I have access to multiple loan options, I can help reduce costs like origination and underwriting fees.
✅ Better Interest Rates: Different lenders offer different rates, and I find the best one for you.
✅ Less Stress: I handle all the behind-the-scenes work, so you can focus on getting excited about your new home!
How Much Can You Save with a Broker?
According to Polygon Research, homebuyers who use a mortgage broker save an average of $13,432 over the full loan term. This figure is based on a loan-level analysis of rates, charges, and credits for non-bank 30-year fixed-rate VA purchase loans (for site-built 1–4 unit properties) that were sold directly to an agency with a $400,000 reference loan value, using 2023 HMDA LAR data.
That’s real money that stays in your pocket instead of going to extra fees and higher interest rates!
Final Thoughts
Closing costs might seem like a lot, but understanding them helps you plan ahead. And when you work with a broker like me, you have someone on your side, making sure you get the best deal possible!
Thinking about buying a home? Let’s chat! I’d love to help you save money and make the process as smooth as possible. 😊🏡
