What You Might not Know About Rochester Closing Costs

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Today we're going to be looking at closing costs and how they can impact your home purchase in Rochester. People often forget about these costs because they are hidden underneath lots of other fees, but they can take a real bite out of your purchasing power if you forget to add them into your costs.

Closing a home involves working with lenders, altering public records and also changing titles on a home. All of this requires time and effort, which will also cost you some money. 

Lenders will give you money for the down payment and charge you loan fees, insurance, interest and reserves as part of your closing costs. Transferring the title of the home also costs money because taxes need to be recorded and transferred, and a lawyer often has to facilitate the process. Throughout this process, there is a title search that must ensure the sellers actually own the home and that no heirs or other people can make claims to ownership after you've purchased the home. To protect from any quibbling about ownership, you must purchase title insurance. 

At closing, your title company will have all the loan, legal, and title costs summarized in an HUD-1 form. 

With rates as low as they are, we often see buyers asking sellers to pay for a portion of the closing costs or to pay for all of them. When asking the seller to pay for the closing costs, your offer on the home will stand and your mortgage will be higher, costing you a few extra dollars per month. If you don't ask the sellers to pay but lower your offer by around $5,000, then you will have to pay for those closing costs, but on the other hand, your monthly mortgage will also be slightly lower. 

There are many important considerations to make when structuring your closing costs, so be sure to speak with your lender about what to do in your specific situation. If you need help buying or selling a home in Rochester, be sure to contact me and I'll do everything possible to make your transaction seamless and stress-free.

We look forward to doing business with you!