When buying a home Closing Costs should be one of the main things to consider so I wanted to put down a brief summary of items that you will need to save up for. This is just a general purpose example. If your buying a condo r a new build you can have additional cost so keep that in mind.

As a loan officer I like to break things down into four categories: Down payment, Mortgage closing, Escrow items and third party costs.

Down Payment- this is the percentage of the price that you are putting down on the home ie 5% down.

Mortgage Closing Cost- This includes any lender fee’s such as underwriting fee’s, processing fee’s, credit report, flood certification, or Broker fee these are all considered Origination fee’s and sometimes are all lumped together as such. Discount fee’s or points are fee’s that are included in purchasing a lower rate and are not origination fee’s.

Escrow Items- This includes the money you will need for taxes and insurance. On a home purchase you will always need insurance for 1 year in advance.

You will also need money to set up your escrow account for future payment of taxes. I will also include here any taxes that are currently due and any prorated taxes that are due to the seller at closing.

Quick tip here is to add up the tax amounts divide by 12 and then multiple by 13. That will likely cover what you need. You could also add 10% to the total and be in the ball park.

Third Party Cost- This includes any title or escrow company fee’s appraisal fee’s any anything else due in association with HOA or real estate company.