Closing Cost Most Home Buyers Don't Know About in California

Most buyers, particularly first time home buyers, only budget and save for their down payment. Whether you're a cash buyer or buying with a loan, there are always additional costs in the process of buying a home and I'll outline them below. There are even more costs and fees when a buyer is using a loan; hopefully, they chose a lender who offers excellent service with little or no fees and low interest rates, to save on their total closing costs, but if there's a loan involved and a buyer has less than 20% down they will be required to pay upfront for property taxes. Prepaid Property taxes typically amount to several thousand and into the ten of thousands depending on what time of year it is how expensive a home is. Another upfront cost with a loan that will need to paid for is prepaid homeowners insurance. It's worth noting that as of 2024, many insurance companies in California and around the Sacramento area have increased or are going to increase their rates at least 30% going forward.

Here are examples of expenses a home buyer should budget for in addition to their Deposit:

-Escrow Fee
-Owners Title Insurance Policy
-Transfer Taxes
-Natural Hazards Disclosure
-Home Warranty
-Inspection Costs

Buyers Using Lenders:

-Prepaid Taxes
-Prepaid Insurance
-Appraisal Fee
-Lenders Fees (Vary by Lender)
-Lender Interest Rate Buydown Points (are negotiable to further reduce interest rate or allow for a larger lender credit to buyer)

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