Sealing The Deal: How Much Are Closing Costs In Alabama?
You may have heard of the term “Sweet Home Alabama” recently, either from Tiktok, Hollywood, or history. But what makes buying homes in Alabama even sweeter is the amount of financial options you have at your disposal. Take single-family owner-occupied properties on land not exceeding 160 acres. Homeowners can apply for homestead exemptions to relieve them of some of the property costs. These resources can push prospective buyers to sign the check or use for a loan to close a deal. That’s all good and dandy. But you may also ask yourself, “how much are closing costs in Alabama?” Closing costs in the State are typically 3.13% of your home’s sale price. The fees usually don’t include realtor fees. If you’re curious to see if you can pull the price back further, there are plenty of other resources or programs you can look into to help you afford closing costs.
What Are The Closing Costs In Alabama?
Before we get into talks of getting help for your closing cost, let’s talk about what the closing costs are in Alabama first. Knowing these obligations will help you avoid any legal issues. This is all part of your due diligence in every property sale.
Title service fees: Property transfers usually need a title search to guarantee no liens or encumbrances. Buyers and sellers in Alabama sometimes pay for title or closing agents to do this.
- Owner’s title insurance: Title insurance safeguards the buyer if something’s wrong with the title. It’ll cover any legal expenses if issues arise.
- Lender’s title insurance: The title policy for a lender safeguards the financial institution that offers a loan to the purchaser.
- Reaccordation tax: Typically, buyers in Alabama are responsible for paying transfer taxes. However, if the seller issues a credit for closing costs, they may assume the obligation to cover the tax burden.
- Alabama recording fees: Legally filing your deed and mortgage is approximately $100, but it can sometimes vary per neighborhood.
Are There Assistance Programs?
Let’s get to the good part. Home buyers now have options to reach their financial goals thanks to assistance programs established in recent years. One of the better-known programs and resources in the State include the Affordable Income Subsidy Grant. HFA Advantage conventional loan borrowers from low-income backgrounds are granted from 0.50% to 1% of their loan total to support covering the expenses for closing. Let’s run down the requirements to see if you qualify. Listed below are the qualifications you need to meet:
- Homebuyers with incomes below 80% of the median income for the property’s location are eligible for the grant.
- First-time and repeat buyers are also qualified for the grant.
- A home buyer has to have a credit rating of 640 or more.
- The interested party should have a debt-to-income ratio of 45% or below.
- Applicant must pass a homeownership education course.
It’s important to note that the Alabama Housing Finance Authority does not offer this grant directly to buyers. A network of lenders works with the AHFA to help home buyers access this resource. You can find the list of partners on their website to help you get started.
Get more detailed information on Fairhope Alabama’s closing costs. Click the link to find out how much you need to prepare: https://localpropertyinc.com/fairhope-al-closing-costs/