Closing Costs – What You Need to Know
As a first time homebuyer in Louisville, Kentucky, you have many things on your mind. It is important to relax and realize that some of the things you may feel are most stressful are not that big of a deal. One of those potential stressors is the idea of paying closing costs. When you’ve already figured out what you will need to put together for a down payment, the last thing you want to think about is another expense. However, if you understand the idea of closing costs a little better you will realize it is not as big of a deal as you may think.
What Do Closing Costs Include?
Think about all the aspects of buying a home that you don’t directly pay for—those are what closing costs cover. Paperwork, the lawyers who handle the closing, title checks, surveying, credit checks and even prepaid taxes are all part of the expenses. Those add up, and someone needs to pay. That payment comes in the form of closing costs.
Who Pays Closing Costs?
The buyer is responsible for closing costs. Does this mean that you, as a buyer, will PAY the costs? Maybe not. Some loans (such as a VA loan) limit what closing costs may be paid by the buyer. Therefore, the “buyer pays” adage isn’t 100% accurate.
What If You Can’t Afford to Pay These Costs?
Well, there are options even if closing costs would be a burden. Many people who use closing costs as a negotiation tactic may make a full-price offer but ask the seller to pay closing costs. Secondly, if you choose certain loans when buying a home, you may be able to roll closing costs into the loan. Ask your lender if this is an option for you since certain requirements will need to be met.
As you can see, closing costs aren’t as big of a deal as you may think. If you’re worried about closing costs or you have questions, it is worth speaking with an expert on the subject. Reach out to us at Liberty Financial in Louisville, Kentucky. We would love to help you with your first (or second or third) time home purchase.