A home purchase has other expenses besides the asking price of the property. Closing costs in Utah are a broad category that includes many of those unforeseen additional expenses. Therefore, if you’re thinking, “How much do closing costs in Utah?” we can help. See what it costs and what it covers by reading on.
Between June 2021 and July 2022, home prices in Utah rose by 19.5%, though they have lately begun to level off. Nevertheless, as of July 2022, the average price of a home in Utah was astounding: $572,971. The average closing cost in Utah is $4,612.20 after taxes, or between 0.92% to 1.15% of the total property sale price.
Utah is much more expensive than the average state in the US, yet there are still some places that are reasonably priced. In fact, the typical housing costs in places like American Fork, Provo Logan, and Eagle Mountain are all significantly lower than the national average.
What are the closing costs in Utah?
Unfortunately, closing costs are also relatively high in Utah. According to our estimates, closing costs will typically range from 2% to 4% of the home’s purchase price in Utah, with sums of up to 5% not entirely improbable. As a result, with an average property price of $573,000, your expenses should be in the range of $11,460 and $22,920.
You might pay the following fees as part of your closing costs:
This payment covers the mortgage lender’s processing expenses.
Before they will give you a loan, lenders will typically want an official appraisal.
You get title insurance when you close on your house. This shields you from any problems that the title may encounter in the future.
Check Your Credit:
Your credit score must be checked to determine your eligibility for a loan. That check is covered by this price.
A deposit of earnest money:
You must provide earnest money with your offer. It demonstrates your commitment to closing and seriousness about your offer on the property. This usually amounts to 1% to 3% of the selling price. The good news is that until you actually close, this money is kept in escrow and used for either your down payment or other closing costs.
Title fees are often just a few hundred dollars and are paid to your lender to cover any recording or courier fees.
Real estate taxes:
Depending on the situation, you might have to pay the prorated amount of property taxes that you would have to over the rest of the year.
When considering purchasing a home, you need also take homeowners insurance, property taxes, utility prices, and maintenance expenditures into account. But this is only a best guess.
In practice, depending on a variety of variables, you might pay more or less.
Utah Home Closing Costs: What to Expect
Closing costs typically range from 2% to 5% of the final cost, so purchasers should plan accordingly. That’s between $6,812 and $17,030 for a home in Utah with a typical price of $340,600; that’s certainly not pocket change! To prevent any unpleasant shocks or late-game failures, these costs must be anticipated and budgeted for far in advance.
So what accounts for these significant closing costs? Title insurance, title searches, taxes, various governmental expenses, escrow fees, and discount points are just a few examples. All of these taken together might put a serious impact in your financial situation.
Even though closing costs may be pricey, the interest rate is one of the biggest costs associated with a mortgage. A few tiny percentage points over the course of the loan can result in interest payments totaling hundreds of thousands of dollars.
How to finance the closing cost in Utah
Closing costs are the additional expenses related to home ownership. Possible inclusions include appraisal, credit check, and loan origination fees. Closing fees are frequently advance payments made for services rendered. Buyers should make sure that their estimations are high because they cannot be rolled into the cost of the loan if they run out of money, unlike the down payment.
Since closing costs is a fee paid upfront and if you are short on cash, the best alternative for this expense is hard money loan from a reputable lender in Utah like 14th street capital. Discover how simple it is to get a hard money loan for any buyer who even have bad credit score.
The hard money loan get faster preliminary approvals can guarantee loan closing in 5–10 days for buyers.
Who covers closing costs in Utah?
In The Beehive State, there are certain closing costs that both buyers and sellers must pay. In Utah, sellers are also responsible for some fees in addition to buyers’ numerous lender, title, and property-related expenses, all of which will be covered in the context of this article.
- Title assistance
- Local transaction fees
- Fees for recording
What variables affect your closing costs?
Your closing expenses in Utah will vary depending on a variety of factors. However, the main factors affecting how much you must spend are (in descending order of importance):
- What kind of homeowner’s association your new house is a part of
- The cost of purchasing your property
- You’ll actually close in a month.
- The county/town’s/property city’s tax rates
A homeowner’s association is a part of the neighborhoods where about 700,000 Utah residents reside (HOA). These societies frequently offer benefits like gardening, garbage collection, and snow removal. These services do, of course, have a monthly price, and that fee can be substantial.
However, many Utahans are unaware that HOAs frequently charge additional fees when houses are closed on. Although these expenses aren’t excessive, it’s typical to shell out a few hundred dollars for transfer and other ancillary fees.
The cost of purchasing your property
The purchasing price of your home is another deciding element. Since expenses like loan origination fees are calculated as a percentage of the total amount you finance, even though it is not a significant factor, it does have an impact.
Since loan origination fees typically range from 0.5% to 1% of the loan amount, financing $400,000 as opposed to $300,000 might result in a $500–$1,000 difference in closing costs.
Your cutoff time
Many people are unaware that your costs can change depending on the actual date of your closing. This is due to the fact that the only time you will ever be compelled to prepay your mortgage interest is the month in which you officially become the owner of your property.
Due to how house loans amortize, if you close on the first day of a new month, you will be responsible for paying the interest for the full month. This can be expensive in the beginning. In contrast, you would only owe one day’s worth of interest if you took possession of your new home on the last day of the month.
Your costs may change by more than $1,000 as a result of this aspect.
The property taxes in the county or town where you purchased your new home are most likely the biggest factor in determining your closing costs. In order to setup an escrow account, you will typically need to prepay several months’ worth of taxes before the house is officially yours. I’ll talk more about this later.
How to reduce closing costs in Utah while purchasing a home
There are some strategies to reduce the amount you’ll have to pay for closing fees, even if there is no way to completely eliminate them.
Negotiating may be quite effective in real estate, like it is in most things. A seasoned real estate agent will probably be able to offer the greatest assistance in this situation because they negotiate deals on a daily basis and have been perfecting their skills for years. Buyers who work with real estate agents can benefit from their expert negotiating abilities and frequently come to an agreement where the seller pays for a percentage of the closing costs.
As an alternative, buyers can apply for a program that covers closing costs. Make sure you’re eligible before relying on this, as the program is only available to veterans, first-time homebuyers, and single parents.