Prepare for Closing Costs When Buying a Home in Alaska
The process of buying a home in Alaska can be both exciting and overwhelming, especially if it's your first time conducting a home search. There are many details to get in order, from the number of bedrooms you need to the best location, and it is easy for a few to fall through the cracks. One in particular that is commonly overlooked is the amount you will owe in closing costs.
Many first-time homebuyers in Alaska are not aware of closing costs, but as your local experts in Anchorage, Eagle River, Palmer, Wasilla, North Pole and the surrounding communities, you can count on Madden Real Estate to ensure you know exactly what you're in for in today's real estate market.
What are closing costs?
Closing costs are made up of both recurring and non-recurring fees from your lender and other parties involved in your real estate transaction. These fees are to be paid upfront, at the closing, unless you have financed them into your monthly mortgage payment or have worked out a deal where the seller pays some or all of the costs owed.
Common closing costs include:
- Homeowners insurance
- Title insurance
- Loan origination
- Home inspection
- Title search and recording
How much are they?
When saving for closing costs, you can expect to pay between two and five percent of the total purchase price of the home in Anchorage, Eagle River, Fairbanks, Palmer, Wasilla, or North Pole AK.
How you can prepare
The first step toward preparing for closing costs is to estimate how much they will run you. If you've already met with a lender and are pre-approved, you can figure this amount by taking the price of your potential home (or the amount for which you are approved) and calculating anywhere from two to five percent. This is the amount you can expect to pay and the amount toward which you should begin to save if you don't plan to finance these into your monthly payment.
Your lender will also be able to share a more difinitive idea of your closing costs once you've chosen a loan product and are given an interest rate.