Great question. Here are the upfront costs to expect when you purchase a home:
- Down payment: This is the portion of the purchase price you agree to cover.
- Third-party fees: These are fees paid to third parties, not Better Mortgage. These services are required to get a purchase loan no matter which lender you use and we don’t mark up the prices. Some of those fees may be paid by the seller. Examples include the appraisal fee, title insurance, and transfer taxes.
- Escrow deposit: If you choose to pay for your homeowner’s insurance and taxes as part of your monthly loan payments, you will need to pay an initial deposit so the account can cover future payments. The number of months required will depend on when these items are due for payment relative to your closing date.
- Pre-paid interest: This is a one-time upfront interest payment due at closing. It covers interest from the day of closing through the end of the month.
- (optional) Loan points: We allow you to get a lower interest rate by paying “points”. In our quotes you’ll see this labeled as “Today’s price for this rate.”