When preparing to purchase a home a buyer needs to not only prepare for the down payment but also the settlement charges.
Total Settlement Charges…
Settlement charges will vary for each buyer so it is difficult to forecast exactly how much a specific person should budget without a complete pre-approval application. That said, please watch this short video which explains how much a homebuyer should plan for based on a median priced home in Portland, OR.
As the video states, on average we are accustomed to seeing homebuyers in Portland, OR pay about $10,000 in total settlement charges for a median priced home.
….includes non-recurring closing costs…
Included in that figure are the one-time non-recurring closing costs, such as the lender’s administration fee(s), appraisal, credit report, title & escrow company fees, and county recording. On average these costs total between $4,000-$5,000 depending on multiple factors including the purchase price, loan amount, down payment, loan program, property type, credit score and others.
…as well as pro-rated and prepaid interest, taxes, and insurance…
In addition, the ~$10,000 total includes pro-rated and prepaid mortgage interest, property taxes, and homeowners insurance. This set of settlement charges will typically total ~$5,000-$6,000 but can vary greatly depending on whether or not the loan will have impounds for taxes and insurance, the amount of property taxes, the closing date, and whether the property has HOA dues.
…be careful in comparing
Unfortunately, Federal regulations do not guarantee that consumers receive a comprehensive and accurate disclosure of upfront settlement charges from lenders at the beginning of a loan application. The result is that some consumers think they are getting the best deal on their home loan closing costs, but when they show up to closing they are faced with the unwelcome surprise of higher upfront charges than they expected.
There are a myriad of factors which can influence a homebuyers closing costs. If you would like to avoid an unwelcome surprise then choose to work with a lender that is ethical and who will take the time to deliver an accurate and reliable disclosure of your settlement charges.
If you are looking for a home loan lender we would love to be a resource. Please contact us today.