When you buy a home you’ll have to pay closing costs, but how much will you have to pay and what does it cover?
Keep reading to find out what you could be paying for your new home in Colorado.
What Are Closing Costs?
Closing costs are money that a seller has to pay to a home buyer when purchasing a home with cash. The closing cost covers fees paid to real estate agents and other professionals like attorneys, as well as taxes, title insurance, title search, government processing fees, and appraisal fees. By establishing this cost up front the process is made easier and smoother for both the buyer and seller. In 2019 the average closing cost for a single family home in the United States was about $5,800.
Closing in Colorado
What you’re paying for when you buy a home in Colorado will depend on whether you’re a first time buyer or already own a home. First-time buyers can expect to pay between 1.5 percent and 2 percent of the sale price of their home. This could be hundreds of dollars for a $150,000 home. However, closing costs don’t cover everything. You’ll also have to pay for property taxes, mortgage insurance, and home inspection. If you’re a first time buyer, keep in mind that if you close on a home after the first of the year, you can deduct your closing costs from your taxes. For sellers, the closing costs on a home in Colorado will be similar to the costs you pay when you purchase a home for the first time.
Lowering Costs
First, you can live in your new home as your mortgage is being processed. You’ll also likely qualify for the Homeowner’s Affordability Plan (HAP) if your income is less than 80 percent of the average regional area. Some builders even offer HAP or other options. Second, you can work with a lender that has “negotiated interest rates” that are less than what the mortgage would cost if you purchased the home with a traditional lender. In other words, you’ll pay a little more for your home and have the lender pay the difference. Some negotiate rates come with insurance benefits, which is a huge plus. Another option is to shop for mortgage lenders that have lower fees for things like home inspections. There are a lot of options out there and this will allow you to save some money.
Let Zech Buys Houses Help
If you’re selling your home in Colorado, closing costs can get expensive. The first step to covering those costs is selling your current home, so let Zech Buys Houses help. We buy houses in any condition fast and in cash, so you have no renovations to worry about. Contact us today to get your written no-obligation offer and you could have cash in hand for your home in as little as seven days. We serve the Colorado Springs, Colorado, area.