Understanding Closing Costs and Their Role in the Home Buying Process

Closing costs are the fees and expenses associated with buying a home. They often include lender fees, appraisal fees, title insurance, and fees for other necessary services. These costs are paid at closing and are separate from your down payment.

When you’re buying a home, there are a lot of expenses to consider. However, one thing that sometimes gets overlooked is closing costs. These fees are a necessary — but potentially unknown — part of completing your home purchase. It’s important to understand what they are and how they all fit into the home-buying process.

While most buyers focus on negotiating the best purchase price and having enough money for the down payment, closing costs can come as an unexpected surprise. That’s why, at Home Creations, we offer our homebuyers the chance to save up to $2,500 in closing costs if they choose to finance the purchase of their home through one of our participating lenders here in the OKC metro. Without having to pay for a credit report, appraisal, flood certificate, or associated fees, our homebuyers can put more money toward the home of their dreams.

The Role of Closing Costs When Buying a Home

Closing costs come into play near the end of the home-buying process, just before the home officially becomes yours. Once you and the seller have agreed upon the purchase price, the closing costs are calculated and due when you close on the house. 

For many buyers — especially first-time homeowners — closing costs can be an unexpected financial burden. Most buyers expect to make a down payment, but they may not be prepared for the additional costs associated with closing, which can add up quickly. 

Closing costs include a range of fees that are separate from the down payment, and without them, the sale cannot go through. Having these fees covered or reduced can make a huge difference in a buyer’s overall budget and stress level.

What Are Closing Costs?

So, what exactly are closing costs? In short, they are the fees that cover various services you’ll need to complete the sale. The bulk of closing costs are paid to your mortgage lender to cover fees associated with borrowing the money needed to purchase the home. Some costs typically included are things like processing your loan, a loan application fee, and discount points. 

Other closing costs can include the home inspection fee, appraisal fee, and title search and insurance. While they may not seem like a big deal at first, all these costs can quickly add up and may push your home purchase over your budget.

Average Closing Costs Nationwide and in Oklahoma

Nationwide, closing costs usually range from2% to 6%of the loan amount. For example, if you plan on borrowing $250,000 you might expect to pay between $5,000 and $15,000 in closing costs.

In Oklahoma, the average is on the lower end of the spectrum — around1.5%, or $3,750 for a $250,000 loan. Even though Oklahoma’s closing costs are more affordable compared to other states, they still represent a considerable expense for buyers to plan for.

It’s important to point out that closing costs can vary depending on such factors as the property’s location, the type of loan, and the lender.

Typical Closing Costs

Here’s a quick look at some of the mostcommon feesincluded in closing costs:

Mortgage-Related Fees

• Loan origination fees:Charges for processing your loan. Often around0.5% to 1.0%of the mortgage value.

• Credit report fee:Varies, but typically less than $100.

• Private mortgage insurance (PMI):0.58% to 1.86%of the loan if the down payment is less than 20%.

Property-Related Fees

• Appraisal fees:To verify the home’s market value. In Oklahoma, these range from$675–$750for a single-family home or individual condo.

• Home inspection fees:To make sure the home is in good condition before purchase. These typically range from$400 to $600.

Legal and Administrative Fees

• Attorney fees:In Oklahoma, it’s not mandatory to hire a real estate attorney to help close the deal, but it is a smart thing to consider.

• Title insurance:Protects against any future claims on the property.0.5% to 1.0%of your home sale price.

• Escrow fees:Fees for holding funds during the transaction process.

Prepaid Costs

• Property taxes and transfer fees:Taxes related to the purchase and transfer of the property. Varies based on the property value and the location.

• Homeowner’s insurance:In Oklahoma, annual rates typically range from$3,400 to $4,200.

Home Creations: Making Home Buying Easier by Covering Closing Costs

At Home Creations, we believe that buying a home should be an exciting, stress-free experience. One way we help make that happen is by partnering with lenders who will cover some of yourclosing costs. This is a major benefit for our buyers, offering the opportunity to save up to $2,500 that you can put toward other things — like moving expenses or furnishing for your new home.

When you choose Home Creations, you can focus on the joy of moving into your new home without worrying about additional fees. We take care of many of the costs so you can enjoy the process and make your dream home a reality.

Which Closing Costs Does Home Creations Cover?

When you finance your new Home Creations house through one of our participating lenders, up to $2,500 of your closing costs are covered. Here’s a breakdown of some of the costs included in this offer.

• Loan origination fee:The fees charged by the lender for processing your loan.

• Appraisal fees:The cost of evaluating the market value of your new home.

• Flood certificate:The fee for determining whether your property is in a flood zone. 

• Credit report fees:The cost of pulling your credit report for loan approval.

• Document preparation fees:Fees for preparing all the paperwork needed for closing.

These are a few examples of the fees that are covered through this program. It’s important to note that you’ll need to work with one of our participating lenders to realize the savings. 

By choosing Home Creations and one of our preferred lenders, you can create some room in your budget for other things, like decorating, moving expenses, or upgrades.

Make Your Dream Home a Reality with Home Creations

Closing costs represent the fees needed to complete the purchase of your new home. From mortgage-related charges to inspections, these costs add up. Buyers can find themselves over budget and faced with an unexpected financial burden. Even in Oklahoma — where closing costs are generally lower than the national average — buyers still need to plan carefully.

Fortunately, Home Creations can help with some of your closing expenses. When you partner with one of our participating lenders, you can save up to $2,500 in closing fees. With over 30 years of experience building high quality, energy-efficient homes at an affordable price, Home Creations helps homebuyers like you purchase with confidence. From competitive pricing and buyer-friendly financing options to move-in ready homes, comprehensive warranties, and closing costs covered, Home Creations is committed to making your dream of homeownership a reality.

Are you ready to take the next step in owning your dream home?ContactHome Creations today, and let us help you make your dream come true.