Boston condos for sale: Crash course on closing costs
Boston Condos for Sale in 2023
Boston condos for sale: Crash course on closing costs
Before you buy a home, it’s important to plan ahead. While most buyers consider how much they need to save for a down payment, many are surprised by the closing costs they have to pay. To ensure you aren’t caught off guard when it’s time to close on your home, you need to understand what closing costs are and how much you should budget for.
What Are Boston Condo for Sale Closing Costs?
People are sometimes surprised by closing costs because they don’t know what they are. According to Bankrate:
“Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome . . . Closing costs vary depending on the purchase price of the home and how it’s being financed . . .”
In other words, your closing costs are a collection of fees and payments involved with your transaction. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:
- Government recording costs
- Appraisal fees
- Credit report fees
- Lender origination fees
- Title services
- Tax service fees
- Attorney fees
- Underwriting Fees
How Much Will You Need To Budget for Closing Costs?
Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical, too. According to the Freddie Mac article mentioned above, the costs to close are typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to cover your closing costs.
Let’s say you find a home you want to purchase for the median price of $366,900. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,500 and $18,500.
Keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.
What’s the Best Way To Make Sure You’re Prepared at Closing Time?
Freddie Mac provides great advice for homebuyers, saying:
“As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”
Work with a team of trusted real estate professionals to understand exactly how much you’ll need to budget for closing costs. An agent can help connect you with a lender, and together your expert team can answer any questions you might have.
It’s important to plan for the fees and payments you’ll be responsible for at closing. Let’s connect so I can help you feel confident throughout the process.
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Buying a Boston condo for sale can be expensive.
The typical downtown Boston condo for sale will set you back over $500,000, according to a recent report from Zillow.
Boston Condo Closing Costs FQA
How do I calculate my Boston real estate closing costs?
Boston closing costs range from 2-5% of the sales price.
When you buy a Beacon Hill condo or any downtown Boston condo for that matter, there shouldn’t be any hidden charges, but there might be some surprises during the homebuying process. Here are a few that catch some Boston real estate buyers off guard.
Boston Real Estate Closing Costs
Boston real estate closing costs can come as a surprise. Your lender may ask you to pay for a year’s worth of homeowners insurance upfront. (the national average for homeowners insurance is $2,305 a year) Lenders will collect one 12th of the amount of property taxes and homeowners insurance and pay the bills the next time they are due.
Boston Real Estate Taxes and Condo Fees
You will need to pay Boston real estate taxes from the day that you close until the end of the month. You may also pay a partial month of mortgage interest and if buying a condo you may pay a partial month’s worth of Boston condo dues.
Boston Condo Downpayment and PMI
Most downtown Boston condo buyers are well aware that they need a down payment which is also usually due at closing. Mortgage lenders include closing costs in their good faith estimates. Borrowers are given a full list of charges before the closing. There should never be a surprise charge at the closing. Also if you put down less then 20% down you will need to pay a monthly fee to Private Mortgage Insurance (PMI)
Once you buy a Beacon Hill condo for sale there may be some more unexpected costs. I always tell people who are buying older homes to start an emergency house fund. Things break and they wear out too. Start the fund with $500 and add $25 a month to it every month.
There are programs that provide funds for down payments and closing costs. I have had a few home buyers take advantage of these programs. There are other options too. Let your lender know you are a first-time home buyer.
Beacon Hill condos for sale: Crash course on closing costs
This video is a crash course on closing costs for Beacon Hill condos.
For more information please contact John Ford at 617-595-3712.
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