What Exactly Are Closing Costs, Anyway?

You’ve heard of closing costs involved with buying a home, but what do they consist of, exactly? I’m joined by lender Ryan Hanson of Finance of America to help me explain.

When you buy a home, you’ll almost always have to pay closing costs. What do these costs actually consist of, though? I’ve brought in Ryan Hanson of Finance of America to help me break this topic down.

When you close on a home, you’ll have a closing cost figure that’s usually just one large number. A few categories of numbers make up this total.

It starts with lender costs, which can be application fees or processing fees.

Then there’s an appraisal, attorney expenses, and interim interest, which is the interest collected at closing. This money makes up the difference between when you close and when your first payment is due.

Then there’s the cost of building the escrow account. This consists of a few months worth of taxes and insurance, and then you’ll pay 12 months worth of insurance. Since we’re near the beach, our insurance could be just a little higher than some people expect.

I want to thank Ryan for joining me and breaking this down in a simple way for us to understand closing costs. If you have questions for Ryan about closing costs or about getting a home loan, you can reach him at 843-628-0909 or email him at rhanson@financeofamerica.com.

As always, if you have any real estate questions, give me a call or send me an email. I’m always here to help!