According to a survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.

After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

Ask Keith Your local AgentBankrate.com gathered closing cost data from lenders in every state and Washington, D.C. in order to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.

More Than Half of All Buyers Are Surprised by Closing Costs | Simplifying The Market

Keep in mind that if you are in the market for a home above this price range, your costs could be significantly greater. According to Freddie Mac,

“Closing costs are typically between 2 and 5% of your purchase price.”

Bottom Line

Speak with your lender and agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.


Over Half of All Buyers Are Surprised by Closing Costs

According to a recent survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage. Process of Buying a House

After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected. Process of Buying a House

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.” – When To Buy A House?

Bankrate.com recently gathered closing cost data from lenders in every state and Washington, D.C. to be able to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment. Process of Buying a House

Over Half of All Buyers Are Surprised by Closing Costs


The one cost of purchasing a home that often shocks first-time buyers

Ok, so you know you need a big chunk of cash to pay the lender for a down payment on that house you want to buy. You may even know about the earnest money deposit; that smaller chunk of money that your real estate agent told you about. And, sure, somewhere along the line the words “closing costs” may have been mentioned but when you see the amount necessary to close the loan, printed in black and white, it’s a whole other story for many homebuyers. Process of Buying a House

Wow!

As a rule of thumb, closing costs run 2 to 5 percent of the loan amount, so if you’re using an FHA-backed loan, your closing costs may be comparable to your down payment.

So, if you are obtaining a loan for $175,000 and you qualify for an FHA 5 percent down payment loan, you will be required to pay $8,750 for a down payment and perhaps even that much for closing costs. Did anyone tell you it may cost you $17,500 IN CASH to buy a house? Process of Buying a House

The truth is, many first-time buyers spend years saving up to pay for the down payment while closing costs come as a complete surprise. Process of Buying a House

What are closing costs?

 The one cost of purchasing a home that often shocks first-time buyers