What are my Closing Costs when Buying a Home in South Carolina?
Understanding Closing Costs When Buying a Home in South Carolina
When you're buying a home in South Carolina, understanding the closing costs involved is key to planning your budget. Closing costs are the fees and expenses you’ll pay at the final step of your home purchase...at the closing. These costs can vary and are almost always determined prior to signing a contract to buy a home and these costs generally fall into four major categories: loan costs and prepaids, lawyer fees, REALTOR® fees, and insurance costs.
1. Loan Costs and Prepaids
If you're financing your home with a mortgage, loan costs and prepaids will make up a large portion of your closing costs. Loan costs include the fees charged by the lender to process and approve your mortgage, such as loan origination fees, credit report fees, VA Funding fees and underwriting fees. You will get these numbers from your loan officer once they give you a preapproval letter. The Truth in Lending Act requires this to be disclosed and within a certain percentage of accuracy. Be sure to understand which type of loan you are getting.
2. Lawyer Fees
In South Carolina, a real estate attorney is required to oversee the closing process. The lawyer will ensure that the title is clear, handle all of the necessary paperwork, and disburse funds. Legal fees can vary with each service that they are providing depending on the complexity of the transaction. Ask your real estate attorney about a these costs. Or look at the lender's estimate.
Your attorney will also conduct a (lender required) title search and ensure there are no outstanding liens on the property. Title insurance, often purchased as part of these services, is another potential expense. The cost for title insurance is typically based on the purchase price of the home, and it protects both you and your lender from title issues that may arise after closing.
3. REALTOR® Fees
Buyers are responsible for covering the brokerage fee (aka commission) for their real estate professional. This is established with a buyer agency agreement in South Carolina and establishes an agency relationship with your real estate professional. Ask your agent specifically what their fees will be. Buyer agent's fees are often part of the buyer's closing costs and should understand how these fees will be handled before entering into a transaction.
4. Insurance Costs
In addition to homeowners insurance, you may be required to purchase other forms of insurance as part of your closing costs. Usually this is an annual fee and established days prior to the closing between you and your insurance agent. Flood insurance, for example, may be mandatory if your home is in a flood zone.
A real estate agent will help you with all of these answers. If you aren't already working with a South Carolina Real Estate Agent. Please reach out and let us see if we can help you.
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