You’ve found the perfect home for sale in Santa Cruz and a mortgage loan with the best interest rate you can find. What’s next in the home buying experience?

Closing.

It's time to sign the contracts, ensure the contingencies are covered, and pay your portion of the closing costs.

But what exactly are closing costs?

These are the most common closing costs in Santa Cruz real estate (click for a full description of each):

Understanding Home Buyer Closing Costs

While working with a real estate agent comes at no cost to you as a buyer, there are still fees you may be required to pay as part of the purchase. If you're planning to buy a home in Santa Cruz, here's a breakdown of the typical closing costs that you can expect to encounter:

Title Fees

These include the title search, title insurance, and the associated attorney fees. These costs are usually paid 50/50 by the buyer and seller in Santa Cruz. When purchasing a home, you'll need to transfer the name on the title and its insurance into your name. 

Recording Fees

The government charges a fee to record the change in ownership of the Santa Cruz property. This is normally paid by the seller.

Appraisal Fee

Are required by the lender to ensure that the value of the property is equal to that of the loan to determine that it matches the property description.

Mortgage Application Fee

Are occasionally included in closing costs, but usually are paid prior to closing by the buyer.

Inspection Fees

Are not required by the lender unless the buyer has a VA loan (Veterans Loan). But an inspection is an important step for buyers to take on their own; to make sure there aren’t any underlying problems that detract from the property value. 

Points

Equal to one percent of the principal of the loan.  These discount points are paid by the buyer to the lender to reduce the final interest rate of the loan.

Brokerage Commission

The seller pays the real estate agent this fee for listing and showing the property, and handling the contract negotiations.  The commission is usually a percentage of the sale price of the property, and determined in advance by the seller and the real estate agent.

Underwriting Fees

The buyer pays underwriting fees to the lender to pay for the costs of determining if the buyer qualifies for the mortgage loan.

Property Tax

County taxes are usually required to be paid for six months in advance at the time of closing.  The buyer is responsible for these fees. 

Learn More About Closing Costs

Want to learn more about what closing costs are and how to avoid them? Check out our other blog post on "Closing Costs Explained: A Resource For First-Time Buyers".

Don't let closing costs take you by surprise! Be informed and always choose a real estate agent that you trust to have your best interests in mind.

Looking to become part of the Santa Cruz community? Contact Lauren Spencer Online or call 1.800.226.4717 today to get started with your home search today!

Posted by Lauren Spencer on
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