Are you interested in buying a home, but on a limited budget and wondering how you will be able to afford the several costs that are associated with your purchase? Some potential homebuyers find that they have enough money saved for a down payment, but don’t have quite enough to afford the closing costs. If you are interested in purchasing a home in Jacksonville, Florida, and want to learn more about closing costs and if certain financial assistance is available to help pay for them, North Star Mortgage Network, Inc. can help. Read on to learn more about closing costs, and if lenders can help pay for them when you are buying a home.

What Are Closing Costs?

Closing costs consist of the additional fees associated with buying a home that do not include your mortgage payment and down payment. They are paid when the title of the property is transferred to the buyer from the seller of the home at the end of the transaction. The amount you will have to pay for closing costs varies and will depend on many factors, such as the area that you live, the type of loan you use to buy the home, and the type of property that you purchase, however, they typically end up costing between 2 to 5 percent of the purchase price. Closing costs typically include:

  • Origination fee – a fee charged by the lender to initiate the loan
  • Application fee – the fee charged by a lender to process the loan application
  • Appraisal fee – the cost for an appraisal company to evaluate the value of the home
  • Taxes – the cost of taxes associated with the transfer of the home from buyer to seller, as well as property taxes
  • Title search and title insurance fees – title search fees ensure that there are no lien or ownership discrepancies with the home, and title insurance fees provide the homeowner against another party claiming ownership of the property

Do Lenders Pay for Closing Costs?

Many homebuyers wonder if mortgage lenders ever pay for closing costs, because many times they will have enough money to afford the down payment, but not enough to cover closing costs. Mortgage lenders do sometimes pay for closing costs in certain situations, however, it is important to note that they will more than likely charge a borrower a higher interest rate, ultimately costing them more money in the end. So essentially, if a mortgage lender pays for closing costs, it allows the homebuyer to buy a home for a lesser cost upfront, however, the homebuyer will end up with a higher monthly mortgage payment because they will be charged more interest on the loan.

If you are interested in buying a home in Jacksonville, Florida, and want to learn more about closing costs and payment options, contact the loan specialists at North Star Mortgage Network, Inc. today for a consultation.