Texas Lone Star Lending Video
Closing Costs Explained: What Homebuyers Often Miss
Closing costs catch many buyers off guard. Here’s what to expect and how to plan for them.
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Read the transcript
Let's take a closer look at one of the most common homebuying mistakes: underestimating closing costs.
When people are saving to buy a home — especially first-time buyers — they usually focus on one thing: the down payment. Do I have enough for the minimum down payment? What often gets overlooked is that there are other costs involved in buying a home.
For most conventional loans here in Texas, closing costs don't vary a lot. They're typically around two to three percent of the purchase price.
What does vary is how much of those costs the buyer actually pays. Sometimes the seller covers some or even all of them. In other cases, a buyer may choose a slightly higher interest rate and have the lender pay part of the costs. What you can't do on a purchase is roll those costs into the loan.
Buyers should also plan for inspections along the way, since you pay for those when the services are provided.
The key is planning ahead so you don't completely wipe out your savings. One of the joys of a new home is making it your own — and it helps to still have some money left to do that.
And remember — it's always okay to ask. We're here to help you get home.