Understanding Closing Costs for a New Construction Home
Building a new home is an exciting journey, but it can also feel overwhelming, especially for first-time buyers. One of the most confusing parts of the process for many people is understanding closing costs.
These are the various fees and expenses paid at the end of the homebuying process to finalize the sale and mortgage. They are separate from your down payment and can sometimes feel like a mystery. Ernest Homes always wants to make your home-buying process as transparent as possible.
That’s why we’re here to help you understand a bit about closing costs for a new construction home.
Understanding Closing Costs for New Construction Homes
What are Closing Costs?
Put simply, closing costs are the fees associated with the final purchase of your new home and the finalization of your home loan. These are separate from your down payment and cover a range of expenses from your lender, title company, and other third parties.
They are essential to officially transfer ownership of the property from us to you and to get your mortgage finalized. Typically, these costs range from 2% to 6% of the home's purchase price.
We know that number can sound a little daunting, but the key is to be prepared. At Ernest Homes, we're dedicated to helping you understand every detail so you never feel surprised along the way.
Your lender is required to provide you with a detailed Loan Estimate after you apply for your mortgage, which will give you a clear breakdown of the costs specific to your home.
What Do Closing Costs Cover?
While the specific fees can vary by loan type and location, here's a general breakdown of what you can expect to find on your Closing Disclosure, which you’ll receive a few days before closing:
- Lender Fees: These include the loan origination fee (processing your application), as well as fees for the home appraisal and credit report.
- Third-Party & Title Fees: Charges for a title search, title insurance, attorney fees, and recording the deed with the local government.
- Taxes and Insurance: A prorated share of property taxes, the first year’s homeowner’s insurance premium, and possibly escrow funding for future payments.
- New Construction Specifics: Fees like a final property survey or initial HOA fees related to community amenities or services.
Your Trusted Partner in Homebuilding
Building a home is personal, and as a family-owned business, we feel privileged to be part of your journey. You're not just a customer; you're becoming part of our family. Our team is committed to making this process as transparent and enjoyable as possible.
We’re here to help you navigate every step, from selecting the perfect floor plan and design choices in our Design Studio to understanding the final paperwork at the closing table.
If you have more questions about the homebuilding process, we'd love to hear from you. Contact us today or visit our website to learn more about the Ernest Homes experience. It's truly our honor to build your home.
