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Home buyers often miscalculate their closing costs. Most are aware there will be fees to pay but don’t know how much is going to be owed. This can lead to a situation where they underestimate the amount being paid and get surprised during the process. In rare cases, it is also possible for a buyer to overestimate the closing costs during the process. This is why it is important to have the information in hand before going into the buying process.
The closing costs can vary depending on the mortgage lender, type of loan, location, and total amount. It is important to have a clear idea of the closing costs before jumping in. This is why the Closing Cost Calculator is useful and something to take advantage of.
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For the most part, you are likely going to end up paying around 0.5% to 5% of the loan amount in the form of closing costs. This will include title, service, and lender fees as soon as the closing is complete. The payment will likely be upfront but some costs can be tacked onto the monthly mortgage payments you make throughout the duration of the loan. While this is easy right now, it does add to the interest that is paid and makes it harder to bring down the principal.
Closing Costs for Home Refinance Loans
When it comes to a home refinance loan for additional cost or looking to reduce the mortgage loan by going for a lower interest rate, it is going to come along with closing costs. While these closing costs are not going to be the same as buying a home, it is still going to be something to account for. The overall expenses will go up when this type of process is initiated.
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General Atlanta Closing Costs
There are basic closing costs that are going to come with purchasing a home in Atlanta or any other part of the state.
Loan Origination Fees
This is a fee that is going to be paid right away for getting a mortgage account up and running. The loan origination fee looks to pay those who set things up and the process that is associated with getting everything assessed. The fee tends to be approximately 0.5% to 1% of the total loan amount. This is a fee that is designed to handle the costs of processing the loan application along with the funding that is provided upon closing. There is also a credit check that is paid for and this tends to cost $200 per person.
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If you are refinancing your mortgage loan at a lower rate and/or using a home refinance loan to cash out some of your home equity, you can expect to pay some closing costs. These typically won’t be quite as much as a new home purchase, but it’s important to factor the closing costs into your overall expenses for a mortgage refinance loan.
Legal Fees
There are going to be legal fees to account for in the state of Georgia. In this state, it is mandatory for there to be a licensed real estate lawyer on hand to help with the process. This is going to include acting as a trusted mortgage broker and handling the purchase contract. Unlike other states, the licensed real estate lawyer is also going to be responsible for acting as an escrow agent. In other states, there would be an escrow company that takes care of this but that won’t be the case when it comes to Georgia. The right lawyer is one that will handle all of this for the client.
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This process is going to include attorney fees. Each attorney has a specific payment strategy. This includes hourly fees or having a straight fee that is paid based on the total loan amount. While others are going to set a sliding fee. It is important to go with the best real estate lawyer to get things right.
Georgia Real Estate Transfer Tax
There is a transfer tax that has to be accounted for when it comes to selling a home. This is paid based on what is negotiated during the sale. The transfer tax tends to come out to be $1 per $1,000 of the property’s sale price.
Property Tax
The property tax is not going to be as high as other parts of the nation but it will be something you have to pay for. You are going to have a prorated payment in the beginning as you will not be starting on the day of the last payment. This is included in the closing cost as a buyer.
Homeowner’s Insurance
All homeowners are supposed to have homeowner’s insurance. This is going to have to be set up before the mortgage goes through. The insurance payment might not have to be paid separately. It can be added to the mortgage payment as a combination payment. On the other hand, some people prefer having them separate to have a clearer look at how much they are paying. It is also possible your part of the state is going to require additional insurance policies including flooding or storm protection.
Property Appraisal and Home Inspection
There are going to be two important tests done on the property before the mortgage is approved. The first is going to be an appraiser that is sent to evaluate the property. They will come up with a price for the property based on their assumption and this will be an independent professional. There will also be a home inspection that is done to make sure nothing was hidden during the sale. If there is something that is uncovered, it can lead to renegotiation on the price.
Private Mortgage Insurance
A private mortgage insurance might be required if you have only put down 20% as a down payment. This is going to be due to the private mortgage insurance that has to be set up. It is common to see this occur for specific types of loans such as FHA, USDA, and/or VA loans. It is also going to include a PMI premium, but this tends to get added to the monthly mortgage payment.
These are the basic closing costs to expect when purchasing a home in Georgia. Before moving in, it is important to ask the important questions and that is where the Moreira Team comes in handy. We are ready to help get you a pre-approved mortgage as soon as you want.