What’s included in your closing costs as a buyer? Find out here.

What’s the deal with closing costs? Though closing costs can be pretty confusing for those who are new to buying or selling a home, they’re still important to know about, so today I’ll explain what they entail in the real estate process. 

Closing costs can be broken down into two sides: hard costs and prepaid costs. Hard costs are pretty straightforward and include things like your title, escrow, and anything you’re paying for the loan. Prepaid costs are a bit trickier. 

Essentially, you are prepaying your mortgage for the month you close upfront. This is why some people prefer to close in the middle of the month. If you do that, you only have to pay half the mortgage upfront. Since you are paying a mortgage you would have to pay anyway, I don’t consider this a “real” closing cost. Yes, you need the money upfront, but the net amount you’re paying doesn’t change. 

The truth is that you will always have to pay closing costs. Since interest rates are on the rise, I highly recommend you refinance now if you haven’t already. If you have any questions about closing costs or refinancing, please call or email me. I’d love to help.