What are closing costs?
This is a question we often get. it’s the expenses that you need to pay in order to finish off the purchase of your home. Some common ones are an appraisal, home inspection, legal fees, title insurance, and land transfer tax. The one other thing which is really important to understand is that you need to be able to document that you have 1 and a half percent of your purchase price, available to you in liquid cash to pay your closing costs. Your lender is going to require proof of this in the form of documentation such as bank statements for example.
There are also some other expenses that you might want to be aware of, AFTER the purchase of your home. For example, whether you hire a mover, or moving van or anything like that, any utility hookups. or also: any cleaning expenses, because you are responsible to leave your home that you sell- if you happen to “upgrading” for example, in clean order.
And finally, you want to be aware that your home insurance is going to go up as a home owner, vs if you happen to be coming out of a rental situation.
Here’s something else that I want you to consider. We have been talking about your closing costs when you’re purchasing a home. But I think it’s really important -most people don’t consider about the closing costs when you go to sell this home that you are now considering buying. For more information about protecting yourself from that, check out my other video in this series called “what is LTV?”
Thanks for watching.