Closing Costs, Escrow, & the Property Tax

When it comes to buying a house closing costs can be a real unwelcome surprise. Closing costs involve a rather long list of expenses that seem to go on forever. All of your closing costs can’t be completely avoided, but with some negotiating you can get your closing costs down. The average homebuyer spends over $3,000 dollars on closing costs, when the finance a home. This number can grow substantially when we talk about closing costs as they relate to higher priced homes.

The escrow process is another area of home buying that will teach you a thing or two. Escrow accounts are set up, so that funds are transferred when certain requirements are agreed upon between the buyer and seller. In these circumstances escrow plays a valuable role, that’s in need when dealing with large value transactions.

In addition to closing costs and escrow, the property tax is also not so popular. Many local governments are heavily reliant on the property tax for revenue, so it won’t be going away any time soon. Depending on your state you can pay anywhere from 1 percent to upwards of 5 percent in property tax. This can be rather burdensome for new homeowners trying make house payments and the like. Fortunately, you can pay your property tax through a mortgage escrow account. This allows you to spread out your property tax burden along with your monthly mortgage payments.