Understanding Closing Costs Is The Key To Costal Living
Purchasing a home is one of life’s most exciting milestones. Yet, as you approach the finish line, a term you’ll often hear is “closing costs”—expenses tied to finalizing your home purchase. While these costs can feel overwhelming, I’m here to break them down in a way that’s simple, empowering, and free of surprises. Let’s make sure you’re not just prepared but confident as you take this huge step toward your coastal dream home.
What Are Closing Costs?
Closing costs are fees and expenses paid at the end of the home-buying process. They typically range from 2% to 5% of the home’s purchase price, covering everything from taxes and insurance to lender fees.
Here’s a breakdown of common closing costs:
- Loan Origination Fees: Charged by your lender for processing your loan.
- Appraisal and Inspection Fees: Verifies the home’s value and condition.
- Title Search and Title Insurance: Ensures the property has no legal disputes.
- Homeowners Insurance: Protection for your investment.
- Escrow Fees: Fees for managing the funds and documents during the transaction.
- Property Taxes: Covers the taxes due at closing.
- Recording Fees: Paid to local governments to officially record your purchase.
Here’s a fun Closing Cost Calculator from Carolina Trust Federal Credit Union.
Primary vs Investment or Secondary Home In Myrtle Beach
In Horry County, which encompasses Myrtle Beach, property tax rates differ based on the property’s use:
- Primary Residence: Assessed at a 4% ratio of the fair market value.
- Second Home or Investment Property: Assessed at a 6% ratio.
For example, on a $250,000 home within Myrtle Beach city limits:
- Primary Residence:
- Assessed Value: $250,000 x 4% = $10,000
- Estimated Taxes: $10,000 x 0.2415 (combined millage rate) = $2,415
- Second Home:
- Assessed Value: $250,000 x 6% = $15,000
- Estimated Taxes: $15,000 x 0.2415 = $3,622
Note: The combined millage rate includes Horry County and Myrtle Beach city taxes. Always verify current rates, as they can change annually.
Why Closing Costs Matter
These costs can feel like an unexpected hurdle, but understanding them means fewer surprises and better budgeting. Knowledge is power, and when you know what to expect, you’re more in control.
How to Prepare for Closing Costs
- Ask for a Loan Estimate: Your lender will provide a detailed breakdown of your expected costs.
- Negotiate with Sellers: In some cases, sellers may agree to cover a portion of your closing costs.
- Plan Ahead: Start saving early to ensure these costs don’t catch you off guard.
Remember: You’re Not Alone
Buying a home, especially when you’re starting fresh after a life change, is an act of courage and hope. I’m here to guide you, step by step, so you can embrace this journey with clarity and excitement.
If you’re ready to explore the Myrtle Beach market or have questions about closing costs, let’s connect. Together, we’ll make your coastal dream a reality!
Understanding closing costs is an essential part of the home-buying process, and it’s closely tied to your pre-approval. When you’re pre-approved for a mortgage, your lender provides an estimate of your total costs, including closing costs, to help you plan ahead. If you’re still exploring pre-approval or wondering how it sets the stage for a smooth home purchase, be sure to check out my article on getting pre-approved for a mortgage—it’s a game-changer for first-time buyers and a key step toward your Myrtle Beach dream home!
