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Are you thinking of buying a home in WA some time soon? If so, there are closing costs that you need to consider. In this article, we’ll outline certain closing costs in WA that are often neglected by buyers.
If you’re in the process of buying a home, you probably have your deposit and monthly mortgage charges in a spreadsheet, along with a chart of your other expenses and your monthly income. But when it comes to buying a home in WA, there are lots of different costs that will come into play – and it’s easy to forget something.
When you’re preparing to close on your new home, make sure you consider these three closing costs that most buyers forget.
Most home purchase agreements are contingent upon a successful home inspection – and if you’re planning to buy a home, you should definitely have it inspected before you buy it. However, home inspectors don’t work for free, and you’ll have to pay a home inspector for a thorough evaluation of the premises.
Home inspection fees depend on the kind of property you’re buying, and can vary depending on your location. For a condo unit, you will typically only need to pay about $250, but a single-family home might cost up to $500. Luxury properties are often more expensive, sometimes even running as high as $1,500.
If the seller already paid for property taxes, HOA fees, or utility bills for the rest of the year or past the closing date, adjustments will have to be made. The seller will need to be reimbursed for payments made that extend beyond closing, and rightfully so. That means you, as the buyer and new owner of the property, will have to cover the cost of these payments in the form of adjustments.
Another buyer-paid closing cost category to keep in mind is prepaid homeowner’s insurance and property tax reserves. These amounts are often collected at closing and set aside as part of the overall funds needed to complete the purchase.
Buyers must pay for title insurance, which is important as this type of policy protects you from any potential issues with the title of the property, In some cases, sellers may not be legally allowed to sell the property. In others, there may be liens on title that will need to be cleared before you take possession. Title insurance can protect you from these issues, but there is a cost associated with such insurance, which is typically a few hundred dollars.
Escrow and recording fees are another closing cost category that buyers should remember when budgeting for a home purchase. These fees are commonly included alongside other transaction-related costs at closing and can add to the total amount due.
If you’re only planning to make the minimum down payment on your home, you’ll need to buy mortgage insurance. Mortgage insurance protects the lender in the event that you default on your loan. This is an added cost that your lender pays, and in general, almost every lender will pass the cost on to you.
You can pay for your mortgage insurance in one large payment, or you can add it to your monthly mortgage payments. Note that if your down payment is less than 20% of the purchase price, you’re legally required to buy mortgage insurance.
One category of closing costs that buyers often forget is lender fees. Lender fees are fees that your mortgage lender will charge for processing the transaction of the loan. These can include appraisal fees, credit report fees, processing and application fees, and administration fees for underwriting.
These fees can range depending on the lender, but in many cases they exceed $3,000. You’ll want to budget about $3,500 to $5,000 to be safe.
Buying a house is a major undertaking, and there are lots of ways that the process could go awry. But a good mortgage professional can help you navigate the process and get the home and the mortgage you’ve always wanted without any issues. Contact your trusted mortgage expert to learn more.
Are you in need of a mortgage to help finance a home purchase? Sammamish Mortgage can help! We are a local mortgage company serving the broader Pacific Northwest region, including Washington state, Idaho, Colorado, California, and Oregon. We’ve been serving borrowers since 1992 and are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have any questions or are ready to get pre-approved for a mortgage.
Closing costs are the fees and prepaid expenses due when a home purchase is finalized. In Washington, they can include lender fees, title insurance, home inspection costs, adjustments, and mortgage insurance in some cases.
Home inspection fees are commonly paid during the home buying process and should be included in a buyer’s budget. The cost depends on the property type, size, and location.
Inspection costs vary by property. Condo inspections are often lower, single-family homes usually cost more, and luxury properties can cost significantly more because they require a more detailed review.
Adjustments are reimbursements to the seller for expenses already paid beyond the closing date, such as property taxes, HOA dues, or utility charges.
Buyers pay adjustments because they become responsible for the property after closing. If the seller prepaid certain costs for a period that extends past closing, the buyer reimburses the seller for that portion.
Title insurance is typically part of the transaction and is an important protection for buyers. It helps cover certain title issues, such as liens, ownership disputes, or other problems affecting the property title.
Title insurance helps protect against covered title defects, including undisclosed liens, ownership claims, and other issues that could affect a buyer’s legal rights to the property.
Private mortgage insurance is generally required when a conventional loan has a down payment of less than 20%. It protects the lender if the borrower defaults on the loan.
Private mortgage insurance may be paid as part of the monthly mortgage payment or through a larger upfront payment, depending on the loan structure and lender options.
Lender fees can include appraisal fees, credit report charges, application or processing fees, and underwriting or administrative costs. These charges vary by lender and should be reviewed carefully before closing.
Whether you’re buying a home or ready to refinance, our professionals can help.
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