If you have looked into buying a home at any point, you understand that there is more to buying a house than making a down payment and getting the keys. Purchasing a home involves closing costs, which cover many legal, financial, and construction matters. Here’s your quick guide to understanding closing costs on new construction homes. If you have any questions or are looking to live in central Maryland, Ameri-Star Homes is here to help.
Closing Cost Breakdown
Title Fees
A property title defines who owns a particular property and any liens on it. When purchasing a new construction home, you will need to cover the costs of a title search, title insurance, attorney fees, and recording fees.
Lender Fees
Your lender will be in charge of appraising the value of your home to finalize the mortgage. You will need to pay for appraisal fees, locking in the interest rate, administrative fees, and an origination fee for the lender to process the loan. Lender fees have everything to do with initiating the mortgage loan itself.
Property Fees
Your new construction home will benefit from a professional home inspection by another party to catch any problems before moving in. When you buy the home, you will also need to pre-pay property taxes and purchase home insurance. If your neighborhood has a homeowner’s association (HOA), then you will need to pay the first monthly fee.
Government Fees
Your local government may also charge fees to record your new homeownership.
New Build Closing Costs
Your builder will charge you for fees regarding the construction of your home, such as land surveying, floor plan customizations, etc.
Mortgage Buydowns and Incentives
The closing costs of new construction homes are not necessarily more expensive than those of existing homes. The builder can reduce the closing costs through mortgage buydowns, which involve an upfront fee to initially reduce the interest rate. The builder can also offer incentives, such as free floorplan upgrades and partial closing cost payments.
How Much Are Closing Costs on New Construction?
How can you calculate the closing costs on a particular new construction home? Closing costs will ultimately depend on your builder, the location, and the property’s size, but you can expect them to be between 2-6% of the home’s value.
Let Ameri-Star Homes Build Your New Custom Home!
Ameri-Star Homes was built on the idea that a home is not complete until the homeowner is 100% satisfied. That’s right, completely satisfied homeowners. Whether you want a home built on one of our home sites or on your own land, count on the same high quality from Ameri-Star. We have set out to exceed all your expectations of integrity, affordability, and customer satisfaction. Build lasting memories for years to come with Ameri-Star Homes.
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