When we meet with potential home buyers, we always review not only what will be needed at closing for their down payment, but also what their share of the closing costs will be.

These home buyers have often already met with another lender but that lender didn’t say anything about closing costs that the buyer would pay. These buyers thought they only had to have their down payment, and that the seller paid all fees at closing.

When we review closing costs, we discuss the fact that most of the closing costs have nothing to do with the lender but are rather title and escrow fees. We explain that the seller may or may not help them with these closing costs and that as the buyers in today’s market, they should expect to come to closing with $4,000 to $8,000 in addition to their down payment. In other words, buyers may need to have the down payment plus part of the closing costs.

Because of this, it’s important for borrowers to shop their mortgage around to several lenders. If they are already paying closing costs, some lenders might also charge high origination and discount points which can make the cash needed for closing that much higher.

As always, shop your mortgage around, but be sure to include a trusted local mortgage company like Indigo Mortgage. We’ve been serving home buyers since 2003.