What is Closing Cost for a Buyer in Trinidad and Tobago?

Many home buyers focus on downpayment and mortgage costs when buying a home. However, there are other important expenses that need to be factored in before homebuyers decide to put an offer in. One of those integral but often forgotten expenses are closing costs.

Despite closing cost being a constant and integral aspect of finalizing the purchase, many homebuyers underestimate its value or in some cases are surprised by these costs in the last stages of their offer.

To clear up any confusion you may have we have a breakdown of what you need to know about closing costs in Trinidad and Tobago:

What are closing costs?

When you are in the process of obtaining a mortgage and buying a home there are many third parties and moving parts involved in the process. This includes your mortgage lender, your real estate agent and/or an attorney.

Each of these services and professionals will have fees that need to be paid before the real estate transaction and the finalization of your mortgage These costs are known as your closing fees.

Examples of these costs include:

• Application fees

• Attorney fees

• Valuation fees

• Mortgage fees

• Stamp Duty fees

Some fees may not be applicable to you but you should inquire about closing costs with your real estate agent.

How much are closing costs?

There are no standard costs for closing costs as they depend on factors such as the state of the market, the type of loan you have taken out, the lender you have chosen and other factors.

However, a general rule of thumb is that closing costs typically make up anywhere between 3%-6% of the total price for a home. For example, if the home is $500,000, you can expect to pay anywhere between 20,000 to 30,000 in closing costs.

It is important to note that your closing costs do not include your downpayment. They are a separate fee that should be factored into your overall cost.

Who pays for the closing costs?

While the closing costs are paid by both the buyer and the seller, the majority of those costs are covered by the buyer. In the negotiation process, the buyer can share more of the cost with the seller, this is known as seller concessions. This can be extremely beneficial especially if the buyer can’t secure the finances to close the offer but there are limitations to how much the seller can contribute. This will also rely heavily on factors such as the type of loan, the downpayment and more.

Averaging your closing costs is an extremely important practice to do beforehand. It is also something you should discuss with your real estate agent as they can help guide you on the fees/taxes you will be subjected to and assist you in the negotiation process.

Need some more information on closing costs? Contact us here and we can help you with the process or any additional information you may need.

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