Purchasing your first home in New Jersey can introduce feelings of excitement and uncertainty. Having never experienced this process before, learning about the different legal requirements and financial expectations can feel like a lot.
Closing costs, in particular, cover a variety of home-related expenses that each play a role in the title transfer. When you understand how these costs impact your buying experience and what they entail, you may feel more prepared to take the next steps.
Closing cost components
Many factors affect how much you may pay for closing costs. According to U.S. News, the average closing costs amount from 2 percent to 5 percent of a home’s purchase price. Some of the expenses covered by this price may include the following:
- Fees to assess your credit score
- Appraisal costs
- Mortgage insurance
- Lender processing fees
- Home inspection costs
- Title search fees
Closing cost negotiation
Closing costs are one thing you can negotiate if you play your cards right. First, you can shop around for the best mortgage rates. Ask lenders what they charge as part of closing. Do they include underwriting and application fees? Additionally, you can negotiate the financial responsibilities of the sale with the seller. Lastly, pay particular attention to the day you choose to close on. Pro-rated fees for various utilities and taxes may not be as high if you wait to close until later in the month.
Working with a legal professional can give you reassurance as you complete the process of buying a home. Strategically determining your closing costs may slightly reduce the amount you owe on your mortgage.