Closing Costs Explained
When you're preparing to buy a home, there's a good chance your main focus is on securing enough money for the down payment. It’s important to remember, however, that you'll also have to pay closing costs on the date the transaction closes. While these costs are generally less than your down payment, they can add up to thousands of dollars.
What Are Closing Costs?
You pay closing costs when the transaction closes. Most of these costs cover the underwriting process that takes place when your lender creates your loan, but certain fees apply to all transactions, even cash deals. These expenses can involve everything from title search fees to appraisal costs. The specific amount you pay depends on where you live and the type of loan you're applying for.
How Much Do You Pay?
Closing costs can be anywhere from 3-6% of the total loan amount, which means that a mortgage of $300,000 may come with closing costs that range from $9,000-$18,000. Depending on your negotiating power, it might be possible for you to negotiate some of these costs with the seller.
Types of Closing Costs
Here are the primary expenses you might expect to pay as the buyer:
· Application fee: Lender charges this fee to process the application
· Appraisal fee: Paid to the appraiser for evaluating the market value of the property
· Closing fee: Small fee that's paid to your closing company
· Deposit for escrow: Up to two months of mortgage insurance payments and property taxes
· Homeowners insurance: Provide evidence that you've paid your homeowners insurance premium
· Title insurance: Protects buyer and lender if a lien or ownership dispute is eventually discovered after the title search
· Origination fee: Covers all administrative costs for processing your mortgage
· Private mortgage insurance: Only necessary if your down payment is less than 20%
· Recording fee: County or city charges this fee to create public land records
· Title search fee: Costs charged to review previous property ownership records
· Underwriting fee: Lender fee to cover the process of verifying a buyer's income, financial information, credit, and employment
Negotiating Closing Costs
You may be able to negotiate closing costs by comparing lender fees before applying or scheduling the closing date towards the final days of the month. You could also work directly with the seller to have them cover some of the closing costs or reduce the purchase price.
Closing costs are part of every home sale. While these costs can be high, your lender should give you an estimate of your closing costs along with your projected monthly payments shortly after you apply for the loan. They will provide the final numbers in the Closing Disclosure a few days before your closing date.
Cool Ways Your Recyclables are Being Turned into Building Materials
In recent years, recycled building materials have become increasingly popular in the world of construction and home design. From glass to newspaper, your recyclables are being turned into a wide range of unique and useful building materials. Here's a closer look at some of the latest advancements.
Recycled glass has been repurposed into many different materials for construction projects. From asphalt to glass bricks to fiberglass insulation, it’s a versatile material known for its durability. In home design, recycled glass can be used to create decorative tiles. These tiles can be used anywhere normal ceramic tiles would be installed - kitchen backsplashes, shower walls, even pool floors. The best aspect of using recycled glass tiles is that they create a distinct appearance that other materials don't offer.
Recycled glass can also be used in large-scale products like countertops and flooring to give a decorative finish.
Newspaper wood turns paper back into wood. To form this material, many sheets of paper are glued together then rolled and compressed into solid logs. When a newspaper wood log is cut, the layers of paper mimic the growth rings of a tree and therefore resemble the aesthetics of real wood. Newspaper wood can be treated like most other wood products by cutting, milling, sanding, and finishing with paint or varnish.
Ecobricks are made directly from plastic waste pollution to reduce the harmful effect that plastic has on the environment. Ecobricks are plastic bottles that are filled with small pieces of plastic waste to create a solid plastic brick. These bricks can then be used to construct buildings or architectural elements in your yard.
Tires take 50-80 years to break down in a landfill, but they are highly useful when recycled into building materials. Shredded or chipped tire rubber can be used as a lightweight and flexible fill material in construction projects like highway embankments and retaining walls.
The same shredded rubber can be used as mulch in landscaping and gardening. Recycled tire rubber is also frequently used to create impact-absorbing surfaces for playgrounds, sports fields, and athletic tracks.
There are many interesting and inventive ways that your recyclables are being turned into building materials. As the construction industry continues to strive for lower carbon emissions, we’re sure to see more sustainable building materials develop in the coming years.
Mariusz „Mario” Misiewicz
cell: (773) 412-0517
on line: www.MisiewiczRealEstate.com