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Typical Buyers' Closing Costs

Advice & Guidance from Naperville Real Estate Attorneys

Buying a home is one of the most costly investments you will make in your life. Don’t be fooled by the price tag on a home – there are several other costs you will incur upon purchasing it. Understanding these charges will help you better budget and prepare to buy a house.

If you have questions or concerns about closing costs when buying a new home, contact our Naperville real estate lawyers by calling (630) 793-6337.

Lender’s Charges

There are several fees that may be charged by a lender when you are buying a house. The amounts will vary and in some cases are not reasonable. The term “points” refers to a percentage point of the loan and is often identified as an origination or service fee. Points are more customary with the refinance of a mortgage, buying down the interest rate, or when the borrower has poor credit history.

Some charges you might incur from a lender include:

  • Processing fee
  • Appraisal fee
  • Credit report
  • Application fee
  • Underwriting fee
  • Loan origination fee/loan service fee
  • Flood certification fee

Other Expenses

In addition to fees charged by the lender, you will likely incur additional fees for other important aspects of your new home.

Be prepared to pay:

  • Title insurance: The buyer purchases title insurance for his/her lender. The cost typically ranges from $75 to $500.
  • Private mortgage insurance: When the mortgage is larger than 80% of the property value, private mortgage insurance may be required.
  • A closing fee: Title companies charge a fee to handle paperwork for your lender and to act as a funds transfer agent. This fee is usually based on sale price. The cost ranges from $300 to $750.

On top of these fees, you may also have to pay city transfer tax based on the sale price of the home. The municipal ordinance will identify who pays the city transfer tax. The parties, however, may contract to the contrary.

The following are examples of local municipalities whose ordinance establishes that the transfer tax is paid by the buyer:

  • Naperville $3/$1,000
  • Chicago $7.50/$1,000
  • Bolingbrook $7.50/$1,000 (split between buyer and seller)
  • Wheaton $2.50/$1,000

You probably have many questions about buying a new home – we encourage you to contact our Naperville real estate lawyers for assistance. Call us at (630) 793-6337 today.

You probably have many questions about buying a new home – we encourage you to contact our Naperville real estate lawyers for assistance. Call us at (630) 793-6337 today.
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