Buyer Closing Costs

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Learning how to buy a house requires some out-of-pocket expenses other than your down payment. There are costs of doing business involved and it's something you want to budget for. Closing costs will vary from city to city but overall this can give you a good idea of what to expect.

1.) Home Inspection! When you purchase a house you will get an inspection completed to confirm what you are buying. A home inspector's cost will vary depending on who you are hiring and the size of the property that is being inspected. You should budget $225-$475 for the home inspection.

2.) Lender fees! Your mortgage broker or lender will have a bunch of miscellaneous fees. They will be labeled all over the place, but basically these are the costs of doing business. This is the cost of getting the loan done and you are paying the bank to process the file. Your costs on this should not exceed $1,500 in general. Costs will vary upon different lenders, but make sure you do your homework on this.

3.) Title fees! Your closing will be done at a title company. This is a place where your lender will wire in all money and title will be transferred to your name. The seller will order title from their preferred title company typically. You are basically paying the title company to use their services. Both the buyer and the seller will incur fees. They can range anywhere from $400-$1,000 on the buyer's side, but they will vary depending on where you close. The seller's attorney should send you a title disclosure form with the preferred title company's current rate card attached. Have your attorney request a copy of the rate card if you do not receive one. If you have a real estate attorney close your transaction you can also expect their fees which can range anywhere between $450-$700.

4.) Transfer taxes/stamps! When you purchase a property you will generally have some taxes to pay. It is customary in Illinois that the buyer pays the city transfer stamps. In Illinois, stamps tend to range from $1.50 per thousand dollar spent to $7.50 per thousand dollars spent. If you are buying a $300,000 home in the city of Chicago you transfer stamps would be approximately $2,250 ($7.50 x 300).

It is very important to understand and get an idea of our true closing costs. The main thing to know is that these costs are in addition to your down payment. They are costs of doing business and closing a transaction in Illinois. Your agent and your mortgage broker should be walking you through these fees to give you a good ballpark of what you will be looking at.