What To Know About Closing Costs Before You Buy a Home in Detroit

By Gwen Daubenmeyer

Gwen Daubenmeyer is the founder of our team. She brings an unwavering commitment to her clients and a get-it-done attitude. Gwen is unapologetically competitive. Marketing and negotiation are her Olympic events; if she could medal, she would. While winning is her “what,” her clients are her “why.”

You found a home you love, your offer is accepted, and you’re celebrating! But then you hear the term “closing costs,” and a question pops into your head: “Wait, how much is that going to be?” If you’re like most buyers, closing costs can feel like a confusing, last-minute surprise. But they shouldn’t be a mystery. Knowing what to expect up front can save you stress and potentially save you money.

So, what exactly are closing costs? Think of closing costs as the final fees and expenses that officially transfer the house to your name. They’re separate from your down payment and are paid at the closing table. Typically, they range from 2% to 5% of the home’s purchase price.

That’s a considerable chunk of change if you’re not prepared. Which is why understanding them now is so important.

Closing costs aren’t just one big, scary number. They’re a collection of specific fees. Here’s a breakdown of the main categories:

1. Lender fees: This is what your mortgage lender charges to process your loan. It includes things like the loan origination fee, credit report pull, and underwriting fees. You’re paying for their expertise and the work behind the scenes.

2. Third-party services: These are crucial costs that protect both you and the lender. They include the home appraisal (to confirm the home’s value), title insurance (to ensure no one else has a claim to the property), home inspections, and recording fees to make the sale official with the county.

3. Prepaid items: This is where many buyers get confused. These aren’t technically “fees” but rather upfront payments for ongoing homeownership costs. You’ll often prepay for homeowners insurance, property taxes, and mortgage interest that will accrue before your first official payment is due.

Here’s a tip many buyers overlook: Some of these costs can be managed. You don’t have to accept the first number you see.

• In a balanced market, you can sometimes negotiate with the seller to cover a portion of your closing costs.
• You can shop around for better rates on homeowners’ insurance.
• Your lender’s fees can sometimes be negotiated or offset with a slightly higher interest rate.

Every little bit of savings helps when you’re making such a large investment.

Closing costs can vary depending on your lender, location, and the specific home. The key is to know your numbers before you get to the closing table. At The Integrity Team, we believe your home purchase should be an exciting experience, not a stressful or confusing one. That’s why we walk you through every single line of your closing statement long before signing day. We explain each fee and make sure you understand exactly what you’re paying for.

You don’t have to navigate this alone. If you’re ready to buy in Metro Detroit, we offer expert guidance you can trust. And if you’re buying elsewhere, we have connections with great agents across the country who operate with the same integrity. We’ll be happy to connect you with a rockstar agent. For more information, please email us at hey@theintegrityteam.com or call us at 248-850-2575. Welcome to The Integrity Team. You belong here.